Canadian currency makes record gains against dollar

April 16th, 2009 - 10:39 am ICT by IANS  

Toronto, April 16 (IANS) The Canadian dollar reached its highest level against the greenback in four months Wednesday, touching 83.24 cents US as markets continued their rally.
The energy-rich Canadian markets have gained about 20 percent since the second week of March as oil prices have made a marginal recovery. The Canadian dollar - or the loonie as it is known - made its strongest showing against the US dollar since January 12 as the Toronto Stock Exchange composite index rose marginally on strong financial shares Wednesday.

The loonie whose fortunes fluctuate with oil prices had sunk to 76.53 cents US March 9 - the lowest level since September 2004. Market analysts here attributed the rise of the loonie to hints of slowdown in the economic downturn.

Positive hints about the economy are encouraging investors to take risks, thus pushing the Canadian dollar up, the analysts said. However, there was more bad news Wednesday as tour operator major Canadian Conquest Vacations folded up as the economic downturn takes its toll on Canada’s money-spinning travel and tourism industry.

The company, which operated tours in North America, said it was ceasing its operation immediately because of tough competition for a much smaller market and credit problems.

“Conquest Vacations regrets the inconvenience caused to the passengers due to cessation of its operations,” the company said. The energy giant Petro-Canada also announced lay-offs Wednesday as it puts a $24-billion oil project on hold.

The company said it is laying off 200 employees in the oilsands of Alberta province.

Falling oil prices have forced Petro-Canada to merge with another energy giant Suncor to cut costs and form one of the biggest oil companies in the world.

Canada has the second largest oil reserves in the world. But much of its oil is extracted from the oilsands of Alberta province. Since it costs up to $80 to extract a barrel of oil from oilsands, the current $50 prices have made Canadian oil operations unviable and hit the nation’s economy very badly.

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