Canadian Dollar Heads to Parity with Greenback

The Canadian dollar traded near parity with its US counterpart after the report showed the new home prices unexpectedly grew in August and as the commodities rallied, increasing the appeal of the growth-related currencies.

The New Housing Price Index increased 0.1 percent in August following the 0.1 percent decrease in July. The analysts expected the 0.1 percent drop. November delivery for crude oil, the key Canada’s export, gained as much as 2.2 percent to $83.45 per barrel on NYMEX, while the MSCI Global Index of equities rose 1.5 percent.

Jim Flaherty, Canada’s Minister of Finance, said Canada would be the first country among the Group of Seven nations to balance its budget by 2015. The analysts estimated Canada’s trade balance deficit to be C$2.2 billion. The government report on the traded balance will be released on Thursday. The good macroeconomic data allowed the Canadian dollar to become the best-performing currency among the 16 majors, heading to parity with the greenback. Last time the loonie reached parity with the US currency was on April 17th.

USD/CAD opened at 1.0098 and dropped to the intraday low of 1.0010 before retreating to 1.0032 as of 17:34 GMT today. EUR/CAD went down from 1.4058 to 1.4005.

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