China Sends Loonie Flying Above $1.10

The move came one day after another huge move in the loonie, this time sparked by Bank of Canada comments that suggest interest rates won't be cut. Deputy Governor Paul Jenkins also refrained from expressing much concern about the currency's appreciation. “It was hardly the forceful condemnation some might have feared, and the Canadian dollar quickly resumed appreciating as soon as Jenkins left the podium,” Bank of Nova Scotia analysts said in a note. The loonie topping $1.10 prompted Ontario Premier Dalton McGuinty to call on the Bank of Canada Wednesday to lower interest rates. The turbulence in global currency markets comes as the European Central Bank and Bank of England decide on interest rates. Both are expected to remain on hold. China delivered a one-two punch to the dollar as a top lawmaker suggested a bigger role for the euro in its hoard of foreign reserves and a central banker said the dollar is losing its global currency status. The euro hit a record high above $1.47 following remarks on Wednesday by Cheng Siwei, vice-chairman of the standing committee of the National People's Congress, China's parliament, pointing to diversification of the country's reserves. http://ctv2.theglobeandmail.com/servlet/story/RTGAM.20071107.wloonie1107/BNPrint/Business

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