For the second day in a row, the Canadian dollar is worth nearly as much as its American counterpart, closing at 99.4 cents US after posting a high of 100.14 cents earlier in the day.
It's a trend that experts believe could persist for some time due to weakness in the U.S. greenback, which is pushing up the value of the loonie -- perhaps for the long-term.
Derek Burleton, the vice-president and deputy chief economist of TD Bank, said currency forecasters think the loonie could stay at or above parity for the next year or so.
But he said the Canadian dollar could easily go back and forth from parity and the U.S. dollar won't stay down permanently.
"We expect to see some, at least temporary stabilization in the weeks to come. So, look for a pullback in the Canadian dollar but a dollar that is likely to hover around parity for the next 6-12 months."
BNN's Frances Horodelski pointed out that the Canadian dollar is only appreciating in comparison to the U.S. dollar, while other currencies are racing past it.
"We focus so much on the U.S. that we forget that our dollar has actually been weak against every other currency in the world. We're only strengthening against what arguably is our major trading partner," Horodelski told CTV News Channel from Toronto on Thursday morning.
Quantitative easing stalls U.S. dollar
The greenback has also dropped due to news that the U.S. Federal Reserve is likely to spend billions on Treasury bills in an attempt to prod the sluggish American economy.
While no firm figures have been released, BNN's Michael Kane said that some experts predict it will be a significant injection of up to US$200 billion.
That's left investors unsure of whether to sell off U.S. dollars.
"The markets are really spooked by the threat of quantitative easing, which is a big fancy world in economics for printing money," said Ian Lee, the director of Carleton University's Sprott school of business.
"The Fed is about to print a lot of money out of thin air, and that's going to cheapen the currency," he told CTV News Channel. "The risk is it's going to introduce inflation into the system."
Serious problems in the U.S. housing market and sluggish employment numbers are also causing concern among investors in the currency markets, Lee added.
As usual, the rise of the loonie comes with various advantages and disadvantages for Canadians: It will make American goods more affordable and trips to the U.S. become cheaper.
But it will make Canadian exports more expensive to sell to the U.S., hurting manufacturers, many of which are located in southern Ontario.
"They are the real losers in this story," Lee said.
With files from The Canadian Press
