The Canadian dollar topped 94 cents US on Friday, as another well-known economist forecast the loonie is on its way to parity with the U.S. greenback.

The loonie was trading Friday morning at 94.21 cents US, up 0.70 of a cent from Thursday's close. The loonie has not been in its current range since late July 1977.

Solid Canadian economic growth and a rise in interest rates will push the loonie to parity with the U.S. dollar by the end of the year, CIBC World Markets chief economist Jeff Rubin said Friday.

Rubin said the dollar will be at par at least into early 2008.

"Between red-hot commodity and energy markets and huge capital inflows associated with an avalanche of [merger and acquisition] deals, the Canadian currency has plenty of octane left to take a concerted run toward parity against the greenback and hold it into at least the first quarter of 2008," said Rubin, who is also chief strategist at CIBC World Markets.

National Bank Financial chief economist Clement Gignac has also predicted the loonie will hit parity with the U.S. currency, but doesn't think that will happen for another 12 to 18 months.

Other economists agree that the dollar has more room to rise, but are not convinced it's going to parity. Economists at TD Securities, RBC Capital Markets and Scotiabank all see the dollar topping out around the 96-cent US level, while BMO Capital Markets has raised its forecast for the loonie to 95 cents US by the end of the year.

Earlier this week, the Bank of Canada signalled that it was prepared to raise interest rates to keep a lid on inflation pressure. In addition, Thursday's report that the Canadian economy grew at an annual rate of 3.7 per cent in the first quarter of the year only added to the sentiment that rates will be going up, possibly as soon as July.

The economy has also been adding jobs, pushing the unemployment rate to 6.1 per cent in April. The May jobless report will be released on June 8.

Rubin said the Bank of Canada now doesn't appear to be worried about a high dollar, saying it would welcome the cooling effect of a strong dollar.

"It now looks untenable, the view that we used to have, that the Bank [of Canada] would intervene against the Canadian dollar," Rubin told CBC News. "I think the Bank's looking forward to a higher dollar."

In an interview Thursday with Bloomberg News, Prime Minister Stephen Harper said the rising dollar "is a reflection of the underlying strength of the Canadian economy."

Harper downplayed the idea of intervening in the loonie's rise to save jobs in the hard-hit manufacturing sector, saying that would be a "huge mistake."