Canadian dollar reaches parity with U.S. dollar

OTTAWA -- The Canadian dollar reached parity with its U.S. counterpart Tuesday morning, as investors looked to park their cash in the fundamentally-sound loonie amid troubles in Europe.

Also, another rate hike from Australia's central bank appeared to heighten expectations that the Bank of Canada will soon follow suit.

Parity was first achieved briefly at roughly 7 a.m. ET in London markets, hitting US$1.0001, achieving a level last hit in July 2008, before dipping down to the 99.70 US cents range. Yet, it catapulted toward parity again, reaching the US$1.0004 level as of roughly 9:45 ET.

"The Canadian dollar's underlying fundamentals are still a strong story and that's what's supporting it," said John Curran, senior vice-president of Canadian Forex.

Among the factors causing a ripple in foreign-exchange markets are Greece's fiscal problems. The euro sunk again – down roughly 200 basis points since Friday – on reports that Germany wants higher interest rates on loans to Greece. There are also suggestions Greece wants to change the proposed wording in the recently announce framework for assistance.