The Canadian dollar surged more than a cent against its U.S. counterpart Friday, adding to a run that has seen it jump by more than four cents in a week.

The loonie closed up 1.39 cents at 89.26 cents US, boosting the rise to 6.5 cents in a month.

The U.S. dollar has also lost ground sharply against the euro and the Japanese yen.

"The U.S. dollar is weaker every day because everyone is worried about this printing of money, and clearly that's the only way I can see that they can get out of this mess — debase the currency," John Stephenson, portfolio manager at First Asset Funds, said Friday.

The U.S. dollar hit a four-month low against the euro Friday, and has fallen about five per cent against the yen in two weeks.

Currency traders are worried that huge U.S. and British stimulus packages will increase deficits and prompt inflation.

The loonie is also strengthening because of rising commodity prices and Canada's relatively good economic performance.

The recent strength in the Canadian currency has taken it back to the level reached in October 2008.

It lost ground over the spring when money flowed into the U.S. dollar, as investors sought security of what is widely seen as the world's currency.

Now that flow has reversed, raising many other currencies against the U.S. dollar.

The rising Canadian dollar has taken some forecasters by surprise; recent predictions by some Canadian banks said the dollar would be in the high 70-cent US to mid-80-cent range by June.

But currencies can move very quickly. The Canadian dollar fell by more than a cent against the U.S. dollar on Feb. 17, and was under 77 cents US in March. It was over $1 US in May 2008.

Winners and losers

As the dollar rises, Canadian exports to the U.S. become relatively more expensive. This makes exporters nervous about a higher dollar.

The tourism industry also suffers, as the cost of a trip to Canada becomes more expensive for U.S. visitors

But importers do better as the loonie rises. The same dollar buys more products priced in U.S. dollars.

And Canadian shoppers who cross the border or order products priced in U.S. dollars will find their loonies stretching further.

The amount of Canadian dollars a U.S. dollar will buy. CBC chart. Data from the Bank of Canada.

With files from The Canadian Press