However, analysts expect the Canadian dollar to reach parity with the American greenback by the end of the year. The last time the loonie had reached parity with the US dollar was in Nov 2007. In fact, at one time one Canadian dollar sold for 1.10 US dollar in Nov 2007.

Fuelled by the rising oil prices, the loonie stayed at par with the US dollar till the economic crisis hit last year and oil prices started dropping.

With plunging oil prices, the Canadian dollar also sank as low as 76.53 cents US March 9 this year - its worst performance against the US dollar in five years.

But in recent weeks, the loonie has jumped on increasing commodity and oil prices, slipping US dollar and less risk aversion among investors to abandon the safety of the greenback.

In July alone, the currency rose almost seven percent against the US greenback, triggering fears as expressed by the Canadian finance minister Tuesday.

But any intervention by the Canadian government and the central bank to contain the currency may have little impact as the global trends are likely to push the US dollar even lower.