Loonie to trade below greenback in 2008: report

The Canadian dollar will stay above parity with the U.S. greenback through the end of 2007, according to a new report by the RBC Financial Group.

However, the dollar will start to reverse these recent gains in 2008 as financial market expectations shift.

“We are forecasting that the currency will end 2008 at C$0.94/US$, which represents a 9.2 per cent depreciation compared to current levels,” said RBC vice president and chief economist Craig Wright.

The Loonie recently reached parity for the first time in more than 30 years, in sharp contrast to an all-time low in 2002.

Manufacturing industry analysts have argued that the strong dollar puts undue strain on Canadian manufacturers and lessens the value of Canadian exports.

The full economic and financial market outlook is available on RBC Financial Group’s website.