Canadian dollar sags on market concerns, lower oil
By John McCrank
TORONTO (Reuters) - The Canadian dollar slid 0.6 percent against the U.S. dollar on Monday after Lehman Brothers Holdings Inc LEH.N filed for bankruptcy protection, giving a bid to the greenback, and as commodity prices weakened.
Canadian bond prices saw big gains along with the larger U.S. market as investors moved out of battered equities and into more secure government debt.
The Canadian dollar ended the North American session at C$1.0679 to the U.S. dollar, or 93.64 U.S. cents, down from C$1.0611 to the U.S. dollar, or 94.24 U.S. cents, at Friday's close.
The currency hit a low point of C$1.0755, or 92.98 U.S. cents early in the session, but then reclaimed some lost ground.
"I would have thought that we would have had a test above C$1.08," said David Bradley, director of foreign exchange at Scotia Capital.
"People are just stepping back and looking at exposures other than foreign exchange and trying to figure out what other implications they're going to have with this Lehman bankruptcy," he said.
Lehman Brothers filed for bankruptcy protection early on Monday after failing to finance risky real estate bets, making it the biggest casualty so far of the global credit crisis.
Adding to the worries, Merrill Lynch MER.N agreed to be taken over by Bank of America (BAC.N: Quote), and the future of insurer American International Group (AIG.N: Quote) was thrown into doubt. Continued...