Canada's Dollar Drops

Canada's currency dropped the most in almost three weeks after crude oil reversed early gains and the U.S. dollar rallied.

The Canadian dollar weakened versus 15 of the 16 most- actively traded currencies, while gaining only against the Mexican peso. Commodities account for more than half of the nation's export revenue. The U.S. is Canada's largest trading partner.

The Canadian currency declined 0.5 percent to C$1.0513 per U.S. dollar at 12:29 p.m. in Toronto, from C$1.0459 yesterday. The decline was the largest since Aug. 8. One Canadian dollar buys 95.12 U.S. cents.

Crude oil fell 2.4 percent to $115.33 per barrel, after earlier climbing above $120 a barrel.

Canada's currency surged 17 percent in 2007 as commodity prices soared. The rally stalled this year as the economy of the U.S. cooled and as oil fell from the record high of $147.27 a barrel set July 11. The Canadian currency touched a one-year low C$1.0728 on Aug. 12.

Canada, Bloomberg
8/28/2008 12:25:51 PM