Dol­lar dips below 70 cents

The Guardian (Charlottetown) - - BUSINESS - THE CANA­DIAN PRESS

The Cana­dian dol­lar closed below 70 cents U.S. Wed­nes­day for the first time in nearly 13 years while the Toronto stock mar­ket reg­is­tered an­other triple digit loss.

The loonie fin­ished the day at 69.71 cents U.S., down 0.43 of a cent since Tues­day’s close. The last time the Cana­dian dol­lar closed be­neath the 70-cent U.S. mark was on April 30, 2003, when it was 69.76 cents U.S.

Colin Cieszyn­ski, chief mar­ket strate­gist at CMC Mar­kets, says the 70-cent mark con­sti­tutes a “pretty sig­nif­i­cant psy­cho­log­i­cal hur­dle.”

Cieszyn­ski said the dol­lar’s de­cline has been mo­ti­vated pri­mar­ily by fall­ing oil prices — and their po­ten­tial im­pli­ca­tions for mon­e­tary pol­icy.

“There’s been a lot of grow­ing spec­u­la­tion that the Bank of Canada’s gov­er­nor (Stephen) Poloz could kick off 2016 with a rate cut the same way he did in 2015,” Cieszyn­ski said.

“There’s a lot of con­cerns that the fall­ing oil price could lead to more lay­offs in the oil sec­tor and deepen the re­ces­sion that we’re see­ing in the oil­patch, so there is a grow­ing pos­si­bil­ity of that, al­though up un­til now he’s been more con­tent to let the fall­ing loonie do a lot of the stim­u­lus work for him.”

The S&P/TSX com­pos­ite in­dex lost 203.49 points at 12,170.41, mark­ing its 10th los­ing day in 11 trad­ing ses­sions since the Christ­mas break. The me­tals and min­ing sec­tor was the big­gest loser on the TSX, drop­ping more than three per cent.

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