The loonie slipped to a 13-year low on Tuesday, but one Canadian economist says there is no need to hit the panic button. The loonie settled Wednesday at 69.71 cents US, down 0.43 of a cent since Tuesday’s close.
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The Canadian dollar fell to below 70 cents U.S.at the Bank of Canada close for the first time since 2003 as plunging oil prices and global economic fears hammered world markets again.
Sadiq Adatia, chief investment officer at Sun Life Global Investments, said the Bank of Canada is eyeing the low price of oil as it considers where to take its benchmark interest rates after cutting them twice past year.
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The S&P/TSX composite index lost 203.49 points to finish at 12,170.41.
The Canadian housing market also showed signs of cooling in December, with housing starts coming in lower than expected despite warm weather and a solid pace throughout 2015.
“Every passing day that oil drops, there’s more likelihood of a rate cut and more likelihood of more drops in the Canadian dollar”, he said. 08 of a cent to end trading at 69.63 cents U.S.
The currency has weakened for 10 straight days against the United States dollar Wednesday, the longest run of daily losses since the country ended its currency’s peg to the U.S. dollar in 1971 and let it trade freely.
Still, it has fallen 5.6 percent in the first two weeks of 2016 as a deep slump in oil prices weighs on the resource-linked market.
That’s the plan says Canada’s Finance Minister.
The Dow Jones Industrial Average surged more than 150 points, while energy stocks pacing a 1.2-per-cent rally in the Standard & Poor’s 500 Index amid dovish comments from the Federal Reserve’s James Bullard.
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Vancouver mining company Teck Resources credits the low Canadian dollar for helping the company weather the downturn in commodity prices, with the company able to sell its copper and coal at US prices while pay operating costs in Canadian.
