The Canadian dollar rose for the fourth straight session on Monday, briefly touching 84 US cents as hawkish comments from the Bank of Canada helped the currency hit 12-year highs versus the US greenback. Canadian bond prices were mixed, as weakness in Toronto stock prices seemed to offset the influence of falling US Treasuries.
The currency finished at C$1.1940 to the US dollar, or 83.75 US cents, up from C$1.1976 to the US dollar, or 83.50 US cents, at Friday's close.
"There's been a fairly significant interest to buy the Canada on a cross-related basis throughout the overnight session and in through today," said George Davis, chief technical strategist at RBC Capital Markets.
The Canadian dollar shot as high as C$1.1903 to the US dollar, or 84.01 US cents, just before midday, its first time at that level since August 1992.
The currency has risen a sharp 8.7 percent since mid-September, benefiting from strong commodity prices, improving economic indicators and signals that Canadian interest rates will continue to rise, thus increasing the yield on Canadian investments.
Most of the gains have come at the expense of the US dollar, which has tumbled under the weigh of the US trade and current account deficits.
But on Monday, the Canadian dollar also saw interest versus the euro and the Australian dollar.
The euro slid after European Central Bank President Jean-Claude Trichet spoke against the swift pace of the currency's recent rise, saying the advance was "brutal" and unwelcome.
Traders attributed the Canadian dollar's strength versus the Australian currency to the outlook for Canadian rate increases, which contrasts with signs that Australia may be in no hurry to raise rates.
"When you look at Australian versus Canada in that respect, I think it makes the Canadian dollar look a little bit more attractive," Davis said. While analysts expect the Bank of Canada will build on its recent rate increases, some have wondered if the sharp rise of the currency might prompt the bank to pause.
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