The Canadian Dollar has reached a 30 year high, riding on the strong prices of their commodity exports. Crude oil delivery rose 1.6 percent to $1.02 to settle at $65.20 a barrel. The value of gold, silver and copper also rose. Commodity trade accounts for 54 percent of Canadian exports. ``The price of commodities provides a long-term support for the Canadian dollar,'' said Francois Barriere, vice president for foreign exchange services at Laurentian Bank of Canada in Montreal. ``Long-term fundamentals are still very, very good for Canada. I see no reason why we shouldn't go to parity in the next 12 to 15 months.'' Weak U.S. home sales had caused the U.S. Dollar to fall, thus giving the Canadian Dollar a boost.
The Canadian Dollar has also hit a 15-year high against the Japanese Yen, with investors taking advantage of carry trades. Japan's relatively low interest rate of 0.5 percent compared to Canada's 4.25 percent encourages investors to borrow the Japanese Yen for investment towards higher yielding assets. ''The carry trade continues to be a favored trade, and Canada-yen is no exception on that front,'' said Matthew Perrier, vice president of foreign exchange sales in Toronto at BMO Capital Markets.
In the foreign exchange, the Canadian Dollar traded at 92.64 U.S. cents after managing to hit 92.79 U.S. cents, which is its highest level since October 3, 1979. The Canadian Dollar previously traded at 92.27 U.S. cents. The Canadian Dollar also traded at 112.88 Japanese Yen.
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