The Canadian dollar rallied over 7% against the US dollar and 11% against the Japanese yen earlier this year on a favorable shift in market positioning, a rebound in crude oil prices and renewed interest in the yen carry trade. USD/CAD is approaching levels that have not been seen since disco and bell-bottom jeans were the rage. Following a record close of 1.6135 on Jan 18, 2002, USD/CAD fell 32% in the next four years to a low of 1.0987 on May 30, 2006. Looking forward, Canada is well positioned to benefit from US investor diversification into foreign securities amidst reduced market risk aversion.

Parity