The rising Canadian dollar would eventually impact the country's already wobbling manufacturing sector, a CIBC economist has said.

CIBC economist Avery Shenfeld said, "Let's not be blinded by near-term monthly gains in output into thinking that currency gains are no longer an albatross around the neck of Canada's factory sector."

The Canadian Broadcasting System reported on Monday that against the U. S. dollar, the Canadian dollar, often called the loonie for the aquatic bird on the back, recently hit 99.38 cents, a 20-month high.

BMO economist Doug Porter recently recalculated his gross domestic product estimate for the first quarter from 3.7 percent to 4.7 percent.

According to the reports of CBS, Canadian factories, however, are still operating at 20 percent below their output before December 2007, when the recession hit. Demand for the loonie is likely to increase in anticipation of the Bank of Canada raising interest rates this spring, sending its value higher. (With Inputs from Agencies)