Loonie surges to 2-month high

Loonie surges to 2-month high
3-cent gain in last 2 days
Last Updated: Tuesday, February 26, 2008 | 12:21 PM ET
CBC News
The Canadian dollar has jumped in value for the second straight day — reaching its highest level in two months.

The loonie was up 1.61 cents US Tuesday against its U.S. counterpart to $1.0209 US in mid-afternoon trading. It gained 1.67 cents US on Monday.

That's the Canadian currency's highest level since Dec. 28, according to Bank of Canada figures.

Currency analysts said rising commodity prices were behind much of the loonie's recent strength. Canada's commodity wealth is widely seen as being a major factor in the value of its currency, so when commodity prices rise, the loonie usually follows.

Oil futures were above $101 US a barrel in New York trading on Tuesday, natural gas prices were up, gold futures gained more than $9.80 US to $950.30 US an ounce and wheat traded above $12 US a bushel for the first time ever.

The U.S. dollar also came under renewed pressure after a measure of wholesale inflation rose by a full percentage point in January — the biggest increase in 16 years — and the U.S. Conference Board said consumer confidence fell dramatically last month.

The loonie went as high as $1.10 US in early November, capping a spectacular climb from below 62 cents US in early 2002. It then slid to around the 97-cent US level in January before beginning its most recent rise.