Loonie at lowest level since September '04
The Canadian dollar hasn't been below 80 cents US since mid-2005.(Adrian Wyld/Canadian Press)
The Canadian dollar took another pounding Monday, dropping almost a cent to 77.59 cents US.
The drop of 0.97 cents US left the loonie at its lowest level since September 2004.
As recently as May, the dollar was at par with the greenback, but it lost ground gently over the summer, and then fell off the cliff in October. The loonie has fallen almost 17 cents this month, the largest one-month move since 1950.
Declining commodity prices — oil and metals — and the fears of international investors, who see the greenback as a refuge in times of turmoil, have contributed to the relative decline of the Canadian dollar.
A number of banks, however, are expecting the Canadian currency to regain some of the lost ground. Forecasts vary from around 85 cents to 96 cents US by the end of 2009, as the world economy strengthens and demand for commodities, especially oil, picks up.
That move could be strengthened as the U.S. dollar may drop against other currencies, given the country's weak economic performance and high levels of debt.
However, RBC Capital Markets is recommending investors still sell the Canadian dollar and buy the U.S. currency, at least in the short term.
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