Canada Dollar Weakens to Lowest Since 2009 as Crude Oil TumblesAri Altstedter
Canada’s dollar weakened to the lowest level since July 2009 on concern tumbling oil prices may endanger development of the nation’s largest export and the business investment needed to drive economic growth.
The currency fell against most of its major peers as dimming prospects for global demand and surging oil supply pushed the price for the international benchmark grade of crude oil below $85 a barrel, the least in four years. That is below the level needed to make some oil sands projects profitable, according to a report from the International Energy Agency.
“People are beginning to question whether we’re getting into a threshold range where some oil sands production becomes dicey and you might start to see an economic impact,” said Emanuella Enenajor, senior Canada economist at Bank of America Merrill Lynch, by phone from New York. “That’s affecting the currency.”
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, fell as low as C$1.1314 per U.S. dollar before trading at C$1.1297 at 5 p.m. in Toronto. One loonie buys 88.52 U.S. cents. This is the first time since July 2009 the loonie has fallen below 89 U.S. cents.
The Bank of Canada reiterated last month the nation’s economic recovery hinges on exports and business investment taking over from over-indebted consumers.