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Loonie closes below 70 cents U.S. for first time in nearly 13 years

Canadian dollar coins are displayed on a map of North America on January 9, 2014 in Montreal. The Canadian dollar slipped below 70 cents U.S. on Wednesday for the second day in a row as the currency traded near lows set nearly 13 years ago.
Image Credit: THE CANADIAN PRESS/Paul Chiasson
January 13, 2016 - 2:02 PM

TORONTO - The Canadian dollar has closed below 70 cents U.S. for the first time in nearly 13 years while the Toronto stock market registered another triple-digit loss.

The loonie finished the day at 69.71 cents U.S., down 0.43 of a cent since Tuesday's close.

The last time the Canadian dollar closed beneath the 70-cent U.S. mark was on April 30, 2003, when it was 69.76 cents U.S.

Colin Cieszynski, chief market strategist at CMC Markets, says the 70-cent mark constitutes a "pretty significant psychological hurdle."

Cieszynski says the loonie's "relentless drive lower" has been motivated primarily by falling oil prices — and their potential implications for monetary policy.

"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," he said.

"There's a lot of concerns that the falling oil price could lead to more layoffs in the oil sector and deepen the recession that we're seeing in the oilpatch, so there is a growing possibility of that, although up until now he's been more content to let the falling loonie do a lot of the stimulus work for him."

The S&P/TSX composite index lost 203.49 points at 12,170.41 — its 10th losing day in 11 trading sessions since the Christmas break.

Plummeting crude prices and lacklustre economic data out of China have been hammering Toronto's stock market in recent weeks.

In New York, the Dow Jones plunged 364.81 points to 16,151.41, while the S&P500 shed 48.40 points to 1,890.28 and the Nasdaq declined 159.86 points to 4,526.06.

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.

News from © The Canadian Press, 2016
The Canadian Press

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