Canadian Dollar Sits on Parity with US Dollar as Risk Appetite Ebbs

Canada’s dollar weakened below parity with its U.S. counterpart for the first time since August as investors’ risk appetite declined.

The currency fell for a fifth day as U.S. equity trading was canceled with Hurricane Sandy barreling toward the East Coast. Moody’s Investors Service warned Oct. 26 it may cut the ratings of six Canadian-based lenders.

“The Canadian dollar is the marquee currency today, breaking parity,” Adam Button, an analyst at forexlive.com in Montreal, said in a phone interview. “We’re continuing to see a fairly strong risk-off tone, while many market participants were expecting an extremely quiet session because of the closures in New York. Canadian banks were put on review for a downgrade, and the market didn’t get to respond last week, and it is today.”

The loonie, as the currency is known for the image of the aquatic bird on the C$1 coin, weakened 0.4 percent to C$1.0010 per U.S. dollar at 5 p.m. in Toronto. It hasn’t lost for five consecutive days since May. The Canadian dollar last closed weaker than parity on Aug. 6. One Canadian dollar buys $0.9990.

via Bloomberg

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