Canada’s dollar plummeted to a five-year low as the selloff in crude oil, the country’s largest export, deepened after Saudi Arabia reduced prices to the U.S. in the face of soaring North American output.
The currency dropped for a fifth day versus its U.S. peer, the longest skid since January, as Bank of Canada Governor Stephen Poloz speaking in Ottawa said monetary stimulus is needed to drive the recovery amid considerable slack in the economy. The Canadian dollar pared losses earlier after the nation’s merchandise trade balance swung to an unexpected surplus in September.
Poloz’s comments are “tying into this perfect storm of bearish news for the loonie,” Bipan Rai, director of foreign-exchange strategy at CIBC World Markets Inc., said by phone from Toronto. “Poloz’s statements of late are there to underline that the Bank of Canada’s bias is to remain on hold until well after the Federal Reserve begins hiking.”
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