Canadian dollar soars against American currency as oil, gold rise

By The Canadian Press

TORONTO - The Canadian dollar is soaring as the American buck falls and key commodities rise following the U.S. central bank's latest efforts to stimulate the economy.

The loonie was up 1.09 cents at midmorning, taking the Canadian dollar to 81.33 cents US. The Canadian currency had been up by as much as 1.78 cents early in the session.

RBC Capital analyst George Davis says the loonie is taking flight because of the American dollar's weakness against most other currencies and because of a spike in oil and gold prices.

The American dollar has fallen because of worries that the latest moves by the Federal Reserve will stoke inflation. In turn, investors have turned to crude oil and gold bullion as protection against inflation.

Gold futures contracts were up more than $66 to US$955 an ounce and crude oil futures were up $3.88 to US$52.02 a barrel in New York in early trading.

Earlier in the day, the Canadian dollar briefly rose above 82 cents US for the first time since early February.