Canada's Dollar Depreciates


Canada's currency depreciated as U.S. stocks fell, signaling an increase in risk aversion.

The Canadian dollar has weakened 11 percent this quarter as crude plunged 39 percent since Sept. 30. Oil accounts for 21 percent of the Bank of Canada's Commodity Price Index, the largest component. The U.S. is Canada's largest trading partner.

Canada's currency, dubbed the loonie for the aquatic bird on the one-dollar coin, fell as much as 0.6 percent to C$1.1962 per U.S. dollar, from C$1.1893 on Nov. 7. It traded at C$1.1921 at 2:04 p.m. in Toronto. One Canadian dollar buys 83.87 U.S. cents.

The Canadian dollar dropped to a four-year low of C$1.3017 on Oct. 28 as oil prices tumbled from a record high of $147.27 a barrel in July.

The yen increased 0.3 percent to 97.90 versus the dollar at 2:53 p.m. in New York, from 98.24 on Nov. 7. The 15-nation euro traded at 124.92 yen, compared with 124.90. The euro rose 0.3 percent to $1.2759 from $1.2718.

Japan's currency appreciated 1.5 percent to 45.06 versus the Brazilian real and 2.3 percent to 56.77 against the New Zealand dollar on speculation investors will unwind trades in which they get funds in a country with low borrowing costs and buy assets where returns are higher. Japan's 0.3 percent target lending rate compares with 13.75 percent in Brazil and 6.5 percent in New Zealand.


TradingEconomics.com, Bloomberg.com
11/10/2008 12:17:24 PM