The Canadian dollar topped the 99-cent (U.S.) mark as oil prices rose and stronger-than-expected economic reports solidified expectations interest rates in Canada will climb before the United States moves its rate.
The dollar strengthened to 99.17 cents (U.S.) from Wednesday's close of 98.44 cents. Oil prices, which tend to influence the currency's movements, hit an 18-month intra-day high of $85.22.
"We're telling people over the longer term we do think it's going to break through parity," said Rahim Madhavji, president of Toronto-based Knightsbridge Foreign Exchange, who has been busy fielding calls from small business owners wanting to hedge and Canadian buyers of U.S. properties.
The currency last traded at par in July, 2008, and hit its modern day intraday high of $1.10 in November, 2007.
The currency could approach an all-time high against the greenback in the next two years as the economy recovers and oil prices rise, UBS said in a report Wednesday.
The Canadian currency has gained 25 per cent against the U.S. dollar in the past year and 22 per cent against the euro. It rose against most other major global currencies Thursday.
The country's gross domestic product rose 0.6 per cent in January, the fastest pace in three years, Statistics Canada said Wednesday. The strength of a range of economic indicators have taken many people, including central bank officials, by surprise lately.