Macquarie Group Ltd.’s David Doyle, Bloomberg’s top-ranked forecaster for the Canadian dollar last year, said he expected the currency to fall to a record low 0.59 United States cents, or C$1.6949 per USA dollar, by the end of the year as he added his voice to those predicting a rate cut next week.
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At one point in the day, the Canadian dollar fell below 0.70 US dollar, the first time it has reached the level since April 2003.
The gain in crude prices followed reports from China that its exports dipped by just 1.4 per cent in US dollar terms in December.
Energy stocks were a source of strength as the February contract for benchmark crude oil rose 72 cents to settle at US$31.20 a barrel. Oil prices have since slid even further, with the benchmark West Texas Intermediate below 32 USA dollars a barrel on Monday, and the Canadian dollar is flirting with 70 US cents.
The loonie was at 69.64 cents USA a half-hour before North American stock markets were to open Thursday, down 0.07 of a USA cent from the currency’s previous close in Toronto.
The S&P/TSX composite index lost 203.49 points to finish at 12,170.41.
Cieszynski said the dollar’s decline has been motivated primarily by falling oil prices – and their potential implications for monetary policy.
The Canadian dollar has fallen to its lowest level in almost 13 years.
With the Canadian Dollar continuing to plummet, though, problems may arise with the salary cap seeing an increase – for a second season in a row.
USA stocks traded higher Thursday, attempting to stabilize after a steep selloff, helped by some recovery in oil prices and comments from Federal Reserve policymakers. The central bank said the fallout from falling commodity prices was extending beyond resource-regions.
That’s pushing the value of the USA dollar higher, he said.
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If it does lower interest rates, it would be exactly a year since bank governor Stephen Poloz announced a surprise cut to offset the impact of the oil price crash.
