The currency’s value fluctuates on a minute-by-minute basis but hit 69.92 cents USA about 20 minutes before noon ET.
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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.
Craig Jerusalim, portfolio manager at CIBC Asset Management, said that while the declining oil price has dragged down the loonie, the currency’s weakness over the past month is due more to the widening gap in monetary policy between Canada and the United States.
On commodity markets, the February contract for benchmark crude finished the day four cents higher at US$30.48 a barrel, while February natural gas gained 1.2 cents to US$2.269 per mmBtu and February gold rose $1.90 to US$1,087.10 an ounce.
The Canadian dollar closed at 0.7013 USA dollar, compared with Monday’s closing rate of 0.7031 US dollar.
The loonie traded as low as 68.74 cents USA about five hours before the Toronto Stock Exchange opened.
The loonie was as low as at 69.46 cents USA after North American stock markets began their day. “I believe there are opportunities … there are also challenges”.
Canada is a major oil producing country and oil prices have plummeted.
The currency has been sinking for some time as a result of lower oil prices, among other factors.
But strength in the US dollar is making the loonie look even worse. “What we’re not getting is clear evidence of the positive effect of lower oil prices, that is a bit of a surprise and that’s what the uncertainty is increasingly now”.
“On top of sliding equity prices, the absence of pent-up demand, and record household debt levels, the deep dive in the Canadian dollar further weakens a soft outlook for consumer spending”, BMO chief economist Douglas Porter wrote in a report Tuesday.
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“There’s been a lot of growing speculation that the Bank of Canada’s governor (Stephen) Poloz could kick off 2016 with a rate cut the same way he did in 2015”, Cieszynski said. It lowered rates again in July to the current 0.5 per cent.
