Associated Press | October 29, 2007

TORONTO (AP) - The Canadian dollar has reached its highest level since the currency was unpegged from the U.S. dollar in 1970, according to electronic trading system EBS.

The U.S. dollar has registered a low of C$0.9554, its lowest level since the Canadian government let the Canadian float in May 1970, according to EBS.

It broke below the earlier low of C$0.9576 reached in April 1974, according to the Bank of Canada, in midmorning trading.

The U.S. dollar subsequently rebounded to the C$0.9560 area.

The push to new highs by the Canadian dollar Monday brings the currency's total appreciation since the beginning of the year to 22 percent, as several factors converged to drive it to parity with its U.S. counterpart and beyond, including record-high oil prices.

Crude oil prices are still firm above $92 a barrel, gold's breaking about $790, so the commodity backdrop is still favorable, said George Davis, chief technical analyst for foreign exchange at RBC Capital Markets.

Also accounting for the rise in the Canadian currency is the country's roaring retail spending, higher interest rates, as well as a strong job market as Statistics Canada reported that the Canadian economy created 35,000 new jobs this past summer, about twice the expected number.

Market watchers say the U.S. dollar's most recent decline against the rallying Canadian dollar has been driven by a broadly based weakness in the U.S. currency and the likelihood that the U.S. Federal Reserve will cut interest rates again this week in an attempt to boost the American economy.

We haven't seen a lot of movement in the U.S. dollar, but it is still on the defensive,» said Davis, noting the British pound and the Australian and New Zealand currencies were also up against the greenback.

In general, the same type of lows we saw last week are still out there impacting the market this week, as well.

The Canadian dollar operated under a floating exchange rate from 1950 to 1962. The U.S. dollar reached an all-time low under the floating rate system in August 1957.

The currency was pegged a narrow band around a U.S. dollar level of C$1.0810 from 1962 until May 1970, when it was unpegged from the U.S. currency and the floating exchange rate regime was reintroduced.

It has remained in place since then.

Dow Jones Newswires contributed to this report.