Australia, Canada dollars near parity with greenback

NEW YORK: The biggest monthly rebound in the Dollar Index since January means faster gains for Australia's and Canada's currencies as the recovering US economy boosts demand for their commodities.

The Canadian and Australian dollars will strengthen to trade at parity with the greenback or better together in 2010 for the first time in 34 years, appreciating at least 2.6 percent and 7.4 percent, three of last year's four best forecasters for both currencies say. Traders are favoring the so-called loonie and Aussie over the dollar on the Chicago Mercantile Exchange even while betting more than ever on the Dollar Index advancing.

Accelerating US growth will spur demand for Canadian oil and natural gas as China's expansion boosts purchases of Australian iron ore and coal, pushing both currencies higher, said Sacha Tihanyi, a foreign-exchange strategist in Toronto at Bank of Nova Scotia.