Loonie down half a cent as oil slumps to near $52 a barrel

Written By Unknown on Jumat, 02 Januari 2015 | 22.41

20110126

The Canadian dollar lost more than half a cent on Friday due in part due to more weakness in oil markets. (Paul Chiasson/Canadian Press)

After a break on New Year's Day, the Canadian dollar resumed trading down more than half a cent from where it ended 2014, and was trading hands at 85½ cents US.

The sell-off appeared to be largely driven by strength in the U.S. dollar, as opposed to weakness in Canada`s currency.

Virtually all of the world`s major currencies have been losing ground when compared to the U.S. dollar of late, because the greenback is perceived to be a safe haven that people flock to during times of uncertainty.

The euro on Friday fell to its lowest level since 2010, down 0.4 per cent to $1.2051 US. Indeed, the U.S. dollar was higher Friday against all 16 of the world's biggest currencies, which doesn't include the loonie.

But part of the loonie`s weakness was related to the continuing slide in oil.

Canada's currency is closely linked to the price of a barrel of oil, which means the loonie has been hammered lowered as the world realizes we're pumping far more oil than we need at the moment.

"Oil prices are flirting with their lows and remain an important weight on [the Canadian dollar]," Scotiabank said in a note to clients early Friday.

The price of a barrel of North American oil was down by almost another dollar on Friday, by 84 cents to $52.43

More to come


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