TORONTO - The Canadian dollar is on a tear for a third day amid rising stock markets and a weak U.S. dollar.

Late in the morning, the currency was up 1.22 cents to 89.25 cents US. The loonie had already surged 2.17 cents US over the past two days.

Steve Butler, director of foreign exchange trading at Scotia Capital, says the dollar is benefiting from a positive start to the U.S. second-quarter earnings season. But he says the surge is hard to pin on one particular area.

He says he doesn't see this as the start of a trend that would return the currency to parity with the American dollar.

The strong performance comes amid dismal economic news as Statistics Canada said that manufacturing sales tumbled six per cent to $38.4 billion in May, the lowest level since November 1998.

That was much steeper than the 0.8 per cent decline that economists had expected.

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