TSX closes 165 points higher; dollar stays below 70 cents US

That’s not good news for our neighbors to the north (or the USA companies that make money exporting to them), but Doyle has been right before, according to the CBC: He nailed a prediction he made last February that the Canadian dollar would fall below 70 cents US within a year.

Predictions of a loonie below 65 cents USA or oil at US$20 a barrel are overstating the case, he said, but market sentiment will remain negative until oil prices stabilize and the Bank of Canada clears up speculation about its monetary policy.

Sid Mokhtari, a technical analyst at CIBC Capital Markets says he’s seen the relationship between plunging oil prices and the loonie grow stronger in recent weeks, a trend he believes could push the currency lower.

It mostly traded below 70 USA cents between 1997 and 2003, a period when manufacturing made up a larger part of exports than oil.

Energy stocks were a source of strength as the February contract for benchmark crude oil rose 99 cents to US$31.47 a barrel.

But oil prices are not the only factor. We think it’s more important to make investments in our economy.

Morneau is in the second day of a six-day tour across Canada to consult with stakeholders from various industries before finalizing the newly elected government’s first budget.

“What we’re looking for is the other side of the oil price decline and we just don’t seem to have that right now”, Watt said.

The economy has relied on consumer spending, especially in the heated housing sector, since the end of the 2008-2009 recession.

The Bank of Canada has cut interest rates twice over the past year, and some market watchers are anticipating another cut next Wednesday.

However, some economists question whether after years of low rates, a further decrease would make much difference. As it turns out, he was even a month early.

Canada’s main stock market in Toronto bounced back into positive territory on Tuesday after falling for nine consecutive sessions, though both oil prices and the Canadian dollar hit 12-year lows.