Loonie reaches parity again with U.S. dollar Friday

TORONTO, Ont. – The Canadian dollar once again hit parity on Friday with its American counterpart, closing at 99.96 cents U.S..

The loonie has been getting some lift in recent days as the U.S. dollar has continued to weaken following an announcement that the U.S. Federal Reserve will take more steps to bolster the American economy.

The loonie was up a little more than a quarter of a cent at 100.02 cents (U.S.) in morning trading.

The Canadian dollar previously hit parity with the U.S. dollar Oct. 14 but hasn’t closed above that level since April 23.

Weakness in the greenback picked up this week after the U.S. Federal Reserve announced it will buy $600 billion (U.S.) in government bonds over the coming eight months in a fresh attempt to energize the U.S. economy.

The Canadian dollar has also been supported by solid advances in commodity prices this week.

Meanwhile, some financial experts predict it will stay strong for some time, which is good news for shoppers heading into the upcoming holiday season.

“The one thing we noticed this year – because the loonie was close to par for quite a while – that people (are) actually planning trips now, so it’s not necessarily impulsive outings (…) people are actually planning ahead of time to go away for a weekend,” said Sandy, who manages the Peace Bridge Duty Free shop.

“If you leave on a Friday and you come back Sunday, you can bring back $400 in goods. The $400 also includes a bottle of liquor or a case of beer, and a carton of cigarettes,” he said, explaining that 48 hours is the magic tax free number.

He told 680News that borders do get much busier when the loonie is strong, but pointed out that wait times have gotten shorter since cross border shoppers are required to carry specific ID in order to get into the States.

However, the strong dollar also has its disadvantages. Sandy pointed out that it knocks out tourism in Canada, with fewer Americans crossing the border.