Canada dollar at 3-week low as credit crunch bites

Thu Oct 2, 2008 4:48pm EDT
 
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* Canadian dollar down 4.4 percent so far this week

* Bonds gain on safe-haven bid as stocks dive

* Focus on U.S. House vote on bailout, U.S. jobs data

By John McCrank

TORONTO, Oct 2 (Reuters) - The Canadian dollar tumbled 1.7 percent against the U.S. dollar on Thursday as tight credit markets put a premium on the greenback and commodity prices fell on concerns that slowing global growth would undercut demand.

Bond prices surged as worried investors continued to seek the safety of government debt amid a weakening global economy and falling stock markets.

The Canadian dollar ended the North American session at C$1.0799 to the U.S. dollar, or 92.60 cents, down from C$1.0620 to the U.S. dollar, or 94.16 U.S. cents, at Wednesday's close.

The currency is down 4.4 percent so far this week and is at its weakest point since Sept. 11.

"We seem to be in an environment where there is shortage of (U.S.) dollars, despite the fact that the central banks have been throwing gobs of liquidity at the markets," said Shaun Osborne, chief currency strategist at TD Securities.   Continued...