http://www.ctv.ca/servlet/ArticleNe...0/loonie_story_070920/20070920?hub=TopStories We will own you! Canadian dollar hits parity with greenback Updated Thu. Sep. 20 2007 1:40 PM ET CTV.ca News Staff The Canadian dollar reached parity Thursday morning with the U.S. currency for the first time in nearly 31 years. The loonie was supported by lofty commodity prices, a strong domestic economy and concerns about a U.S. economic slowdown. At 10:58 a.m. EDT, the loonie rose as high as US$1.0004 before backing off to 99.86 cents US -- up 1.36 cents US from Wednesday. Analysts say what helped pushed the Canadian dollar over the top was some new trade data from Statistics Canada, which reported the economy was surprisingly strong in July. The chief economist at the TD Bank Financial Group says there are clear winners and losers from an economic perspective. But on balance, the impact is negative for the Canadian economy, said Craig Alexander. "The dominant negative impact comes in terms of the export sector. And exports are traded basically at about 40 per cent of the Canadian economy, so a rising Canadian dollar makes our exports less competitive, creates a weaker profile for manufacturing shipments, and it tends to lead to a slower pace of economic growth," he told CTV Newsnet. The high dollar means domestic manufacturers have to try to sell goods south of the border at a discount or have been priced out of U.S. markets. Alexander says the strong loonie also makes life difficult for the tourism and hospitality sectors. On the other hand, it's a positive for importers, wholesalers and consumers. The loonie, which has been gaining ground on its American counterpart in recent years, rose sharply on Tuesday -- its highest closing price since January 1977 -- after the U.S. Federal Reserve cut U.S. interest rates more than expected. The Canadian currency has also been helped by increased prices in the energy sector. Crude oil prices have hit new highs and are selling about US$80 a barrel. The Canadian dollar was last at the US$1 mark on November 25, 1976, when Pierre Trudeau was prime minister and Rene Levesque had just become Quebec's premier. The Canadian dollar's all-time high against the U.S. dollar occurred in 1957. That's when it closed at $1.06 U.S. It reached a low of 62 cents US in 2002. Weak U.S. greenback The American dollar's weakness was evident across most currencies Thursday as it slumped versus the euro, the British pound, the yen and Swiss franc. And Alexander warns it's important to keep in mind that the exchange rate we watch so closely is the value of the Canadian dollar compared to the U.S. currency. "In recent years what we've been getting is a rise in the loonie on a strong economy, and commodity prices -- which are domestic fundamentals," he told Newsnet. "But it's also a reflection of weakness in the U.S. dollar, which has been falling against most major currencies. "And although the Canadian dollar has outperformed the euro and many other currencies in the last year, the reality is most currencies have been going up against the U.S. dollar." Bush: Fundamentals are 'strong' While the U.S. greenback continues to tank against the Canadian dollar and the euro, questions are being asked about the health of the American economy. President George Bush pushed aside those concerns on Thursday, telling a news conference the U.S. economy is healthy, despite this rough patch. "I say that the fundamentals of our nation's economy are strong. Inflation's down, job markets are steady and strong. The national unemployment rate is 4.6 per cent. Corporate profits appear to be strong, exports are up." He added, however, there is no question that these are "unsettling times" for the housing market." Commenting on the mortgage crisis in the U.S., Federal Reserve chairman Ben Bernanke said it has created "significant market stress." He offered assurances that regulators would take steps to curb any related fallout. "Global financial losses have far exceeded even the most pessimistic estimates of the credit losses on these loans," he said in remarks prepared for presentation to the House of Representatives' financial services committee. Treasury Secretary Henry Paulson signalled that the administration would consider allowing big mortgage companies Fannie Mae and Freddie Mac to temporarily buy, bundle and sell as securities any loans exceeding US$417,000. The idea is portrayed as a way to inject liquidity into the stretched mortgage market.