Thaindian News

Toronto, April 15 (IANS) Driven up by rising commodity and oil prices, the Canadian dollar has crossed parity with the US dollar for the first time in two years.
At the end of trading Wednesday, the Canadian currency - called loonei - closed at 100.08 cents US.

The Canadian dollar had hit the historic high of 1.10 cents against the US greenback in November 2007. Then it had sunk to 77 cents US last year as the global crisis deepened.

With no signs of recovery of the greenback given the ballooning US deficit, the Canadian currency is unstoppable unless some bad economic news derails it.

But with a resource-rich country, which sends 78 percent of its exports to the US, the rising currency is posing challenges for Canadian manufacturers and exporters.

Apart from Canadian exports, the rising loonie will also hit tourism from the US which accounts the bulk of visitors to this country.

Retailers are bound to suffer as Canadians will cross the border in large numbers to shop in the US on the strength of their currency vis-à-vis the US greenback.

According to the country’s top five banks, the Canadian dollar will stay above the greenback this year and could probably slide back next year if the US recovery picks up.

Analysts predict the Canadian currency to outperform other major global currencies such as the euro, the pound and the yen as the resource-rich Canadian economy posts major gains on recovery.

Canadian markets also made big gains Wednesday on positive economic news from the US.

The Toronto Stock Exchange composite index gained 70.2 points, crossing 12,171 points on better-than-expected earnings of $2.4 billion by chip giant Intel in the first quarter.

But Canadian markets are still way off the historic high of 15,000 points reached in June 2008.