Canadian dollar tops 77 cents US

The Canadian dollar roseabove 77 cents US on Wednesday, a day after U.S. Federal Reservechair Janet Yellen brought the U.S. currencyback down to Earth with her comments on the American economy.

The loonie, as it's known, closed at 77.17 cents US, up by .68 ofa cent. Earlier in the day the loonie was at 77.44cents US,itshighest level since October.

The loonie'sgain comes despite a slightly downday for oil, which lost threecents to trade at $38.25 US a barrel.

U.S. dollar sliding onFed comments

The loonie has been gaining ground for more than 24 hours since Yellenreiterated Tuesday afternoon that America's central bank will only ratchet interest rates higher gradually.

"Just when the greenback was getting a renewed lift from Fed officials talking up an April rate hike, along comes the chair to put it and them in their place," BMO economist Sal Guatieri said.

The greenback was slipping against both the euro and the yen as well as the Canadian dollar.

• A 59-cent loonie? It could happen this year, Macquarie says

After bottoming out at a new 13-year low near 68 cents USearlier this year, the Canadian dollarhas quietly staged a mini-rally and is now the best performing major currency in the world since January.

After the strong 2015 the U.S. dollar had, some watchers now think the loonie has room to grow, at least in the short term.

"We are concerned that the window is closing on the potential for the [U.S. dollar] to rebound further," Scotiabank's chief foreign exchange strategistShaun Osborne said in a note to clients Wednesday.

"The U.S. dollarmay well have peaked at 1.3295 [Cdn] last week," Osbornesaid, referring to the amount of Canadian dollars that can be bought with a U.S. one.

Flipped around, that suggests Osborne thinks the Canadian dollarmay not go lower than just over 75 cents US again for a while.