Canadian currency opened with gains in new year on Monday indicating that it is on course for parity with the US dollar.
The increase in the trend might be due to the rise in metal and crude prices and hence the composite index on the Toronto Stock Exchange (TSX) rose 120.79 points to close at 11,866.90. It is 1% above the index as compared to the last week’s performance.
With the trend of metals and oil, the Canadian loonie or dollar also rose almost 1% against the US dollar to reach 96.02 cents US, which may send a strong challenge to the US dollar in market exchange.
This is the first sign of recovery of both the markets and the Canadian currency since sinking to new lows in March last year.
The Canadian markets hit to the lowest level with almost 7,500 points in March 2009. And, since then, it had already gained almost 50% to recover some of the losses.
But according to the analysts, there is still some time for the markets to gain the momentum like the performance in June 2008 when the composite index of the Toronto Stock Exchange crossed the 15,000-mark for the first time in their 150-year history.
The Toronto Stock Exchange is the third largest trading market in North America and the world's largest energy market, with over 400 oil and gas companies’ trade lists on it.
Earlier the Canadian dollar reached parity with the US dollar in last October when it touched 98 cents US. But it retreated on fears of government intervention as the rising currency was thought to be harmful to the recession-hit manufacturing sector in the country.
According to market analysts, if the trend continues, then the loonie can reach parity with the US dollar any time this year. There is also much apprehension of US government debt and subsequent recession that has contributed for the continual slide of the US currency. The US currency gained last time in 2002.
