Loonie pounded again, touches lowest level in 4 years
Good news about jobs didn't help the Canadian dollar Friday.(Sean Kilpatrick/Canadian Press)
Canada's currency ended an awful week Friday afternoon, down more than 2½ cents US in the week's final session and briefly touching its lowest point in four years.
Currency traders shook off Canada's stellar jobs showing in the morning and shaved 2.59 cents US off of the loonie to close at 84.69 cents.
Thursday's final fixing had the Canuck dollar worth 87.28 cents.
The foreign-exchange market was so negative on the Canadian dollar Friday that, at one point, the loonie hit its lowest mark since November 2004, at 82.97 cents.
Then, perhaps just as startling, the dollar gained more than 1.5 cents in the final 30 minutes of trading, a remarkable swing.
Jobs report positiveThe loonie plunged despite a brief burst of optimism early Friday when Statistics Canada reported that the country produced more than 100,000 new jobs in September.
After the jobs report was published, the dollar initially recovered to a level of 86.22, up from a low of 85.84 in prior trading. But as traders began to consolidate their holdings, the Canuck currency nose-dived, falling below 85 cents.
The dollar lost 8.5 per cent of its value against the greenback this week.
Many global currencies are losing value in the face of the financial crisis that is spreading throughout the industrialized world.
Traders are concerned that the economic prospects for countries such as Canada are diminishing as growth in the United States and Europe slows.
"Data is so secondary at the moment, unfortunately, given all the other turmoil in the financial markets," Steven Butler, director of foreign-exchange trading at Scotia Capital Inc. in Toronto, told the Globe and Mail.
In addition to the strong jobs showing, the Canadian government said it would buy $25 billion in mortgage-backed securities to support the country's financial institutions.
Financial markets, however, zeroed in on falling oil prices instead — crude is now trading below $80 US a barrel — and punished the Canadian dollar.
Other currencies have been hammered as well as investors buy American dollars despite the weak economic indicators coming out of the United States.
The British pound is at a five-year low versus the greenback, and the Mexican peso has declined for eight straight days as investors run to the U.S. dollar as a safe haven in uncertain currency markets.
Down under, the Australian dollar lost almost five per cent of its value against the American dollar Friday, hitting 66 cents US.
Corrections and ClarificationsThe Canadian dollar was not down 3.59 cents US on Oct. 10, as initially reported. In fact, it had fallen by 2.59 cents. Oct. 10, 2008 | 10:09 p.m. ET
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