CANADA FX DEBT-Canadian dollar plunges on oil, politics

Thu Dec 4, 2008 5:11pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Canadian dollar drops 1.9 percent

* Oil prices plunge, political uncertainty grows

* Bonds rise after central banks rate cuts

By Cameron French

TORONTO, Dec 4 (Reuters) - The Canadian dollar fell for the seventh-straight day versus the U.S. dollar on Thursday, dropping nearly 2 percent on the back of a sharp drop in oil prices and political uncertainty in Canada.

Bond prices leaped on aggressive interest rate cuts by overseas central banks, and worries about recession, which stoked the safe-haven appeal of government debt.

The currency ended the session at C$1.2781 to the U.S. dollar, or 78.24 U.S. cents, down from C$1.2535 to the U.S. dollar, or 79.78 U.S. cents, at Wednesday's close.

Canadian Prime Minister Stephen Harper persuaded the country's governor general on Thursday to suspend Parliament so he could avoid being ousted by opposition parties next week.

The move means a struggle between the government and the opposition for power will continue well into January. Analysts said the ongoing drama has raised concerns about the country's ability to deal with the economic crisis.   Continued...