Canadian dollar hits parity

The loonie hit and surpassed parity with the

U.S. dollar on Tuesday. (Mark Blinch/Reuters)

The Canadian dollar hit and surpassed parity with the U.S. dollar on Tuesday, the first time it had accomplished the feat in more than a month.

Early in the morning, the loonie surged to hit the $1 US level. That was the first time the Canadian currency had hit the benchmark since Nov. 10. By 8:30 a.m., the loonie was changing hands at 100.13 cents US, up 0.94 of a cent on the day.

On Monday, the Chinese government hiked interest rates in an attempt to get inflation under control. That should have sent investors flocking to safety havens such as the U.S. dollar, but so far that hasn't happened. The U.S. dollar was lower against most of its major benchmarks on Tuesday.

Underwhelming data on the U.S. housing market this week also worked to drag the U.S. dollar lower. "Cheap housing prices … make investors hesitate to buy the dollar, especially when the market thins at the end of the year," Tokyo-based currency analyst Toshiya Yamauchi told Bloomberg.

The Toronto Stock Exchange was closed on Tuesday, and is set to reopen Wednesday. U.S. markets in New York, however, are poised to open. The futures market suggests the Dow Jones, Nasdaq and S&P are all poised for early gains.