Canada's Dollar Falls for a Second Day

Canada's dollar fell for a second day after the price of crude oil declined and traders speculated the Bank of Canada may cut interest rates next week.

The Canadian dollar depreciated against 11 of the 16 most- active currencies. Commodities, such as crude oil and gold, account for about half of Canada's exports.

Canada's dollar fell 0.5 percent to 99.79 Canadian cents per U.S. dollar at 10:34 a.m. in Toronto, from 99.34 cents on May 30. One Canadian dollar buys $1.0022.

The loonie, as the currency is known because of the image of the bird on the one-dollar coin, has traded near parity with its U.S. counterpart this year after climbing 17 percent in 2007. It touched a 2008 low of C$1.0379 on Jan. 22, and a high of 97.12 cents per U.S. dollar on Feb. 28.

Crude oil for July delivery fell as much as $2.13, or 1.7 percent, to $125.22 a barrel and traded at $126.02 in electronic trading on the New York Mercantile Exchange.

Canada's economy unexpectedly contracted in the first quarter, Statistics Canada reported on May 30. Gross domestic product, the sum of all goods and services produced in Canada, shrank at an annual pace of 0.3 percent from January to March, after 0.8 percent growth in the previous period. Economists surveyed by Bloomberg News had forecast 0.4 percent growth.

Canada, Bloomberg
6/2/2008 8:49:37 AM