The Canadian dollar is creeping closer to parity with the American greenback, closing up 0.73 of a cent to 96.48 cents US on Tuesday.

The dollar had risen to as high as 97.42 cents US earlier in the day, and it's expected to keep gaining strength if the value of the U.S. dollar continues to plummet against other world currencies.

The weakness of the greenback drove the value of the loonie up from about 95.75 cents on Friday.

Prime Minister Stephen Harper expressed concern about the dollar's rise on Tuesday. Speaking in Vancouver, he said the loonie's strength poses a risk to Canada's economic recovery.

Harper said the loonie is ultimately the Bank of Canada's responsibility, but did not give advice for what the central bank should do.

Eric Lascelles of TD Securities said two factors are contributing to the loonie's rise.

"Part of it is simply that the U.S. dollar itself is quite weak, so many currencies are experiencing some gain versus the U.S. dollar," Lascelles said Tuesday during an interview with CTV News Channel. "But the Canadian dollar seems to be experiencing even more than most and it seems to me that of course we've seen some very healthy, surprisingly healthy, economic data in Canada."

Lascelles pointed in particular to Statistics Canada data from last week that showed the country's unemployment rate fell from 8.7 per cent in August to 8.4 per cent in September, for a gain of about 30,000 jobs.

"Indeed that economic data has been sufficiently strong I think as to persuade some players in the market that perhaps there's a risk the Bank of Canada could hike rates sooner rather than later. And of course that's always a positive thing for a currency, as well."

The loonie has also soared because of a heightened demand for commodities in the global market, and the demand for commodities has gone up because the U.S. dollar took a nosedive, according to BNN's Michael Kane.

"It has a slingshot affect because commodities are priced in U.S. dollars," Kane told News Channel. "So when the U.S. dollar goes down against other currencies, it makes gold and oil, platinum and copper relatively more attractive to non-U.S. investors, so that has the effect of people coming in and buying up gold and having the effect of driving prices of gold higher."

"That's a positive for the Canadian currency because our economy is tied into the price (of commodities) so it's like a doubling of the influence when the U.S. dollar gets weaker and that's what we're seeing here today," he added.

While a weak U.S. dollar may give Canadians more purchasing power, it will also cause serious financial struggles for the manufacturing industry, Kane said.

Kane said the international market might look elsewhere for cheaper deals on commodities and other Canadian exports. The markets indicate that the loonie will likely soar in value to match the greenback and will likely stay that way for a while, he said.

"When it does hit parity, and maybe goes beyond a little bit, we'll see it stuck there for what is being called 'an extended period of time,'" he said. "If the normal value of the Canadian dollar is at par, then the manufacturing industry in Canada which sells into an international market will have to take it very, very seriously because what it means is that other countries can supply manufacturing goods perhaps at a cheaper rate."

As for when the loonie may hit parity with the greenback, Lascelles said analysts are hesitant to say that whether it's a matter of weeks or months.

"But who am I kidding? When you're only two or three cents away, obviously anything can happen on a day-to-day, week-to-week basis," he said. "Our view is that yes, parity is reached and yes you even perhaps breach it ever so slightly by a cent or two going into early 2010."