The rally in the Canadian equity markets has also fuelled the currency's rise as investors abandon the safety of the US dollar and venture into fresh buying.

Market analysts say if the loonie crosses the 95 cents US mark, the central bank (the Bank of Canada) may be forced to intervene as any further rise in the currency will erode any chances of recovery.

Though the central bank has not intervened to contain the loonie since 1998, its hands may be forced once the currency crosses the 95 cents mark.

The bank could accomplish this task by increasing money supply to bring the loonie artificially down - a step that will not be welcomed by other nations.

The bank could also ease credit supply to rein in the runaway currency.

But for the time being, Canadian shoppers and tourists to the US can have fun as a higher loonie buys them a lot now.