Canadian dollar tumbles to lowest level since 2005

Wed Oct 22, 2008 9:50am EDT
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* Canadian dollar flirts with levels below 80 U.S. cents

* Stronger U.S. dollar and weak oil blamed for slide

* Canadian retail sales fall 0.3 percent in August

By Frank Pingue

TORONTO, Oct 22 (Reuters) - The Canadian dollar tumbled to its lowest level versus the U.S. dollar in more than three years on Wednesday as lower oil prices and a stronger greenback combined to knock the currency below 80 U.S. cents.

Bond prices were higher across the curve as the latest economic data out of Canada, including retail sales, fell short of market estimates.

At 9:35 a.m. (1335 GMT), the Canadian unit was at C$1.2500 to the U.S. dollar, or 80.00 U.S. cents, down from C$1.2137 to the U.S. dollar, or 82.39 U.S. cents, at Tuesday's close.

Earlier, the Canadian currency fell as low as C$1.2545 to the U.S. dollar, or 79.71 U.S. cents, a move blamed largely on a stronger U.S. dollar as investors liquidated riskier assets.

"The selloff that we've seen overnight was clearly the result of the U.S. dollar strength," said Matthew Strauss, senior currency strategist at RBC Capital Markets. "But this morning, the selloff continued due to lower commodity prices."   Continued...