Canada’s dollar had its worst start to a year since at least 1972 amid speculation the central bank may favor cutting interest rates and as a selloff in emerging markets sent investors to the haven of the U.S. dollar.
The currency weakened past C$1.12 to the greenback for the first time since July 2009 as data showing a fifth month of economic growth failed to stem speculation the Bank of Canada will ease monetary policy. The loonie, as the currency is called, has lost 1.5 percent since the central bank reduced its inflation forecast last week and cited the currency’s strength as a headwind to non-commodity exports.
“We’ve been banging against the 1.12 level so often that market dynamics finally took us through,” Steven Englander, global head of foreign exchange at Citigroup Inc., said by phone from New York. The Bank of Canada “will continue to stress that in the world we’re in, a weaker Canadian dollar is part of the solution, not part of the problem.”