The loonie’s downward momentum is carrying on Thursday morning (September 24) after hitting an 11-year low and falling below US$0.75 at the close of trading the day prior.
The Canadian dollar was trading at US$0.7487 by 9 a.m. Thursday, continuing its slump from the previous day when economic data from China showed private manufacturing had fallen to its lowest levels since 2009.
Signs of a slowing Chinese economy fanned speculation it could still be a while before commodity prices begin to recover.
And Canada’s resource-dependent economy wasn’t paid any favours after two consecutive days of tumbling crude oil prices, which closed at US$45 a barrel Wednesday.
In a speech Monday, Bank of Canada governor Stephen Poloz said there's little the bank can do about resource price shocks, "but our policy can help the economy adjust to them."
Canada is the only G8 country to cut its benchmark interest rate twice this year, part of the BoC’s efforts to provide a buffer to the economy in the midst of plummeting oil prices.
The cut in the benchmark rate has helped send the dollar from about US$0.92 a year ago to its current levels, which in turn has made it cheaper for the strengthening U.S. economy to import Canadian goods.
@reporton
