Canadian Dollar Declines to Two-Month Low

Canada's dollar touched the lowest in two months as commodities extended their losses, reducing the currency's appeal., Bloomberg 3/24/2008 6:36:48 AM

The move follows a drop of 3.4 percent last week in the Canadian currency, the steepest since 1985, as investors shunned commodities on concern that a slowing U.S. economy will curb global demand for energy, metals and grains. Commodities account for about half of Canada's exports.

Canada's dollar dropped 0.1 percent to C$1.0246 per U.S. dollar in Toronto at 9:06 a.m. It touched C$1.0309, the lowest since Jan. 23. One Canadian dollar buys 97.59 U.S. cents.

Gold declined after its biggest weekly drop in 25 years as a gain in the U.S. dollar eroded demand for alternative investments such as bullion. Crude oil fell for a third day in New York on concern the slowing U.S. economy will cut consumption and the dollar's gain will reduce demand for commodities as a hedge against inflation.

The Canadian dollar weakened against 12 of the 16 most- traded currencies.

The yield on Canada's two-year government security traded little changed at 2.565 percent. The price of the 4.25 percent bond due December 2009 was C$102.78.

Canadian Dollar Declines to Two-Month Low