Bonus Dollar

The Canadian dollar is riding high again. Up from its spring and early-summer range of 101 to 102 U.S. cents, it was trading last week for about 103 U.S. cents. Main cause of the upturn: continuing flow of U.S. investments, including huge purchases of Canadian securities by newly formed investment trusts, just at the time when the annual rush of U.S. summer tourists was reaching its peak.

Although Canadians could take pride in the strength of their currency, their satisfaction was not shared by exporters of such products as newsprint and wheat, whose prices are usually set in terms of U.S. currency, or by the government, which would prefer to see the dollar hold steady at about par with the U.S. dollar. In an effort to flatten out the daily fluctuations of the dollar, the Bank of Canada bought $70 million in U.S. funds during June and July, but the effort was not enough to prevent an overall rise. Said a Bank of Canada official: "Since June the American dollar has gone down about one cent, vis-`a-vis the Canadian dollar ... If we had wanted to, we could have prevented this, but we would have had to spend much more than $70 million."

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