Toronto, Oct 7 (IANS) The Canadian dollar hit the highest level in 2009 against the US greenback Tuesday.

The loonie - as the Canadian dollar is known - reached 94.66 US cents during the day. It is the highest level the Canadian currency has reached against the US dollar since October 1, 2008.

The loonie has sunk as low as 77 US cents in March this year as oil and commodity prices plunged globally. Since then the Canadian currency has made steady climb as the greenback got battered against other currencies.

Tuesday's rise of the Canadian dollar against the US currency was also fuelled by speculative reports that many oil-producing Arab and non-Arab countries might switch over to non-dollar currencies for tradig in oil.

Rising commodity prices, led by gold, also pushed up the Canadian markets, with the composite index on the Toronto Stock Exchange reaching 11,247.97 points.

The gold sector was up a hefty 5.2 per cent as the US dollar continued its slide amid fears that Obama's massive stimulus package is paving the way for runaway inflation.

The Canadian energy sector was up two per cent as prices of crude oil - Canada's main export - rose above $71.

Resource-rich Canada - which has the second largest oil and gas reserves in the world apart from its wealth of uranium, gold and diamonds - has been the hardest hit by the US economic crisis.

Its oil and gas, manufacturing and auto sectors have been severely impacted as the US is the biggest market for these sectors. More than 85 percent of all Canadian exports go to the US.

In fact, trade with the US alone accounts for 40 percent of Canada's GDP and one third of all jobs in this country.

The daily trade between Canada and the US is more than $1.5 billion. After the economic crisis, Canada is seeking free trade pacts with the EU, Indian and China to lessen its dependence on the US.