Source: The Canadian Press

The Toronto stock market headed for a positive session Thursday as continued weakness in the U.S. dollar lifted prices for oil and metals.

The weak greenback also lifted the Canadian dollar past parity for the first time since the end of April, up 0.56 to 100.08 cents US.

U.S. futures were higher as investors remained confident of the prospect of more monetary stimulus from the Federal Reserve. However, predictions of looser U.S. policy have not done the dollar any good as it slid to a 15-year low against the yen and multi-month troughs against the euro and the pound.

The Dow Jones industrial futures gained 20 points to 11,064, the Nasdaq futures were up 5.5 points to 2,061.5 and the S&P 500 futures headed up 2.4 points to 1,176.7.

The faltering U.S. currency pushed the November crude contract on the New York Mercantile Exchange up 53 cents to US$83.53 a barrel.

Signs that demand may be improving also supported crude prices.

The American Petroleum Institute said late Wednesday that crude inventories fell four million barrels last week — an unexpected drop that suggested demand may be growing.

OPEC oil ministers meeting Thursday were expected to keep output targets unchanged, indicating they are happy with prices which have stayed within a range of around US$75-US$85 per barrel in recent months.

The December copper contract on the Nymex advanced two cents to US$3.84 a pound while December gold pushed $11.30 higher to US$1,381.80 an ounce.

Traders are sending the U.S. dollar lower because of expectations the Federal Reserve will start buying government bonds to try to stimulate the sluggish economy. Buying bonds would drive down interest rates from already low levels. That makes gold and other currencies where interest rates are higher more attractive than the dollar.

Though the prospect of more dollars in the financial system has driven stocks higher, the U.S. dollar has tanked.

“The dollar sell-off has accelerated following the release of the latest set of FOMC minutes which had signalled that members are considering more unconventional measures to lift inflation expectations including introducing a price level or nominal GDP target,” said Lee Hardman, currency economist at the Bank of Tokyo-Mitsubishi UFJ.

“Dollar holders’ anxiety over the potential implications of upcoming Fed policy actions has understandably ratcheted up another notch.”

Markets rose sharply Wednesday on hopes the Fed could move to bolster the economy as soon as its next interest meeting, set for Nov. 2 and 3.

The main Toronto index rose almost 100 points to its highest level since late September 2008 and the Dow industrials ran ahead 76 points.

Earlier in Asia, Tokyo’s benchmark Nikkei 225 stock index jumped 1.9%, Australia’s S&P/ASX 200 rose 1.7% as did Hong Kong’s Hang Seng index.

London’s FTSE 100 index dipped 0.12%, Frankfurt’s DAX gained 0.56% and the Paris CAC 40 was ahead 0.14%.

In corporate news, shares in Internet search engine Yahoo were up more than 15% in premarket trading in New York after The Wall Street Journal reported that AOL and several private-equity firms are considering a possible takeover bid.

Meanwhile, rival Google reports quarterly earnings results after the market close.

Diageo PLC, the world’s biggest spirits maker, says first quarter sales rose 5% to 2.06 billion pounds (US$3.3 billion) due to stronger demand in developing markets. The London-based maker of Smirnoff vodka, Captain Morgan rum and Guinness beer retained its forecast of “improved organic growth” in operating profit for this year in a trading update on Thursday.