Loonie Tanks to Year LowThursday, September 22, 2011 > 15:33:15
The Canadian dollar plunged overnight, following its first close at less than parity with the U.S. greenback since January, and was at less than 97 cents US Thursday morning.
Around 7:15 a.m. ET, the loonie was at 96.62 US, which was 2.79 cents lower than Wednesday’s close of 99.41 cents US. It’s the first time the loonie has closed at less than $1 US since Jan. 31.
The relative decline of the Canadian dollar is largely due to gains in the U.S. dollar, as investors seek less risky investment in the wake of the U.S. Federal Reserve statement Thursday that there are “significant downside risks” in the economy.
“Confidence was already shaky, at best, and the Fed’s words only heightened worries about the outlook,” BMO Capital Markets economist Benjamin Reitzes said in a research note.
Commodities such as crude oil, gold and copper, which are important to the Canadian economy, were seeing significant price declines Thursday morning.
In New York, crude oil was down $3.80 to $82.12 US a barrel, gold was down $52.70 to $1,755.40 US an ounce and copper fell 2.3 cents to $3.534 US a pound.