Canadian dollar continues slide against greenback

Wed Aug 6, 2008 9:48am EDT
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By John McCrank

TORONTO (Reuters) - The Canadian dollar slid further against the U.S. dollar on Wednesday, as investors bought the greenback amid a broad-based decline in commodity prices.

Domestic bond prices rose, reversing some of Tuesday's losses after the U.S. Federal Reserve's interest rate decision and statement.

At 9:20 a.m. EDT the Canadian dollar was at C$1.0467 to the U.S. dollar, or 95.54 U.S. cents, down from C$1.0419 to the U.S. dollar, or 95.98 U.S. cents, at Tuesday's close.

The Canadian dollar has fallen 1.9 percent against the U.S. dollar so far this week.

"CAD isn't falling for any Canada-specific reasons, but really just by default as the (U.S.) dollar is being bid up against everything," said Adam Cole, head currency strategist at RBC Capital Markets in London.

The U.S. dollar had slipped against many major currencies after the Fed held interest rates steady on Tuesday and issued a fairly neutral statement. But it rallied again in Europe.

A recent fall in commodity prices, including oil and base metals strengthened the greenback, and weakened the commodity linked Canadian dollar.

U.S. consumers, already facing a housing slump and a credit squeeze, were being pressed by high prices at the gas pump and elsewhere. Canada, the biggest supplier of oil to the United States and a net exporter of many key commodities, had cashed in on the higher energy prices.   Continued...