Canada's Dollar Falls

Canada's dollar fell after a government report showed the nation's trade surplus shrank to a nine-year low in December., Bloomberg 2/14/2008 6:38:55 AM

The amount declined to C$2.35 billion ($2.35 billion) from a revised C$3.76 billion in November, Statistics Canada said in Ottawa. Economists had forecast the surplus would narrow to C$3.4 billion from the agency's initial November estimate of C$3.7 billion.

Canada's currency, known as the loonie after the image of the bird on its one-dollar coin, fell to 99.88 Canadian cents to the U.S. dollar at 8:47 a.m. in Toronto, from 99.71 cents yesterday. One Canadian dollar buys $1.0013. The currency earlier touched 99.44 cents before the release of the report.

The Bank of Canada on Jan. 24 reduced its 2008 economic growth forecast to 1.8 percent from 2.3 percent, citing weaker U.S. demand for Canadian exports. Canada ships about 80 percent of its exports to the U.S.

Bank of Canada Governor Mark Carney signaled Feb. 9 that policy makers will decrease the 4 percent benchmark lending rate in the coming months to head off an economic slowdown.

The yield on Canada's two-year government bond fell 2 basis points, or 0.02 percentage point, to 3.05 percent. The price of the 4.25 percent security due in December 2009 rose 3 cents to C$102.06.