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Canadian dollar coins.Larry MacDougal

The Canadian dollar nearly one cent against the U.S. currency Monday as the price of crude oil rallied and global financial markets were upbeat on the first trading day of 2010.

Equities got a boost after surveys showed Chinese manufacturing activity expanded at the fastest rate on record in December and the recovery among European manufacturers, led by Britain, gathered pace.

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Markets were awaiting Institute for Supply Management's manufacturing index for December in the U.S., which analysts forecast would rise from the prior month.



Understanding the Canadian dollar: A four-part series

  1. What should the value of the Canadian dollar be?
  2. When the Bank of Canada likes the rising loonie -- and when it doesn't
  3. Who sells Canadian dollars
  4. Why the Canadian dollar has been bouncing higher


"A lot of the focus this morning was on China and higher commodity prices, and a broadly weaker U.S. dollar are all helping the Canadian dollar and other commodity currencies," said Camilla Sutton, currency strategist at Scotia Capital.

Oil , a key Canadian export, climbed above $81 (U.S.) a barrel, the highest in more than two months, boosted in part by an oil dispute between Russia and Belarus.

The Canadian dollar's move higher extends the 2009 rally in which the Canadian dollar closed up 15.9 per cent against the greenback, rebounding from a near 19 per cent drop in 2008.



Market Outlook 2010:

  • Key to corporate bonds in 2010: Be very selective
  • Five bubbles set to burst in 2010
  • One-year clock ticking for income trusts
  • David Rosenberg: Some year-ahead prognostications
  • Greenback's slide expected to continue
  • Star stocks of the decade and Dog stocks of the decade
  • Five reasons to be bullish or bearish on markets


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