The Canadian dollar reached a five-year low on speculation a slump in crude oil, the nation’s biggest export, will sap economic growth. The currency weakened for a second day as crude traded 20 percent below the $80 a barrel level the International Energy Agency says about one-quarter of Canadian producers need to turn a profit. Bank of Canada Governor Stephen Poloz reiterated that lower crude prices may slow 2015 economic growth by one-third of a percentage point.
“It’s oil, the theme that’s been driving the markets the last few weeks,” Greg T. Moore, a senior currency strategist at Royal Bank of Canada, said by phone from Toronto. “It’s an obvious risk that bolsters our bearish view on the Canadian dollar versus the U.S. dollar and could push” the loonie to weaken beyond his forecast that it will reach C$1.18 in 2015.
The loonie, as Canada’s currency is known for the image of the aquatic bird on the C$1 coin, depreciated 0.3 percent to C$1.1521 per U.S. dollar at 5 p.m. Toronto time. It touched C$1.1550, the weakest since July 13, 2009. One Canadian dollar buys 86.79 U.S. cents.