The high-and-mighty vitriol which greeted Tom Mulcair's comments last week about the downside of oil-powered currency appreciation is lamentable (repeating the over-the-top reaction to Dalton McGuinty's similar comments a few weeks ago). Mulcair made two modest and empirically substantiated statements: the loonie is sky-high as a result of the oil boom in Alberta's bitumen sands (I doubt you'd find a single currency trader on Bay Street who would disagree with that), and that overvaluation is causing negative side-effects on other industries and regions in Canada.

Want to know why Canada's currency is sky-high despite our sluggish recovery, our large and persistent current account deficit, and our lousy export performance?

Check out this fascinating story in Friday's National Post, by Yadullah Hussain, on why Canada's oil reserves are such a uniquely hot commodity in the eyes of global oil corporations.

The most interesting comments from Bank of Canada Governor Mark Carney last week, in releasing the Bank's semi-annual Monetary Policy Report, dealt with the relationship between the price of oil and the Canadian currency. The Globe and Mail reported Carney as publicly questioning why currency traders automatically presume such a direct link between the loonie and the world oil price. After all, he accurately pointed out, Canada produces a lot more than just oil.

The Canadian dollar at par with the American dollar? Yes, it is only a question of time say economy watchers. And the Loonie has flown up above 98 cents U.S., and could well remain a few cents below or above the U.S. dollar for awhile.