The Canadian dollar closed above 80 cents US Wednesday for the first time in more than a decade. It opened the day strong, at 80.14 cents US, and closed at 80.29 cents US.

The loonie hasn't closed above 80 cents since March 1993, though since Oct. 5, 2004, it has remained mostly above 70 cents.

The boost to the loonie comes one day after the Bank of Canada hiked rates by a quarter of a percentage point to 2.5 per cent, with central bankers saying they wanted to keep a lid on inflation.

Canada's strong economy can't take all the credit for the rise, though. A slide in the U.S. dollar against other currencies is a significant factor, says ROBTv's Linda Sims. As currency traders dump the greenback, "we are a currency of choice right now," she says.

"It's really just a matter of the U.S. dollar more broadly being down against the Euro, against the yen, against the Swiss franc, against the Pound sterling, and Canada is going along for the ride," says David Wolf of RBC Capital Markets Senior Economist.

Wolf says strong commodity prices for oil and minerals are also boosting the dollar.

"Canada is rightly or wrongly, seen as a commodity-based currency. As those prices go up, so goes the Canadian dollar," he explains.

The loonie's strength reveals a confidence in the Canadian economy, Prime Minister Paul Martin says.

"It corresponds to the dynamism we see in the Canadian economy and that's a good thing,'' Martin told reporters before attending an event celebrating the history of Irish Canadians.

"Everybody is in favour of a dollar that reflects the Canadian economy.''

In related news, Statistics Canada reported that the composite index -- an early measurement of economic performance -- is continuing to slow.

Growth was 0.3 per cent in September, following advances of 0.5 per cent in August and 0.7 per cent in July. It hit a two-year high of one per cent in June.

"The sources of growth were the narrowest in 16 months," StatsCan said.

Meanwhile, wholesale sales grew for the sixth consecutive month in August, the agency reported. Sales were up 0.7 per cent in August, which "was attributable in part to a surge in sales in the machinery and electronic equipment sector," StatsCan said.

The agency said wholesalers sold $38.3 billion worth of goods and services in August, up from $38.1 billion in July.