Loonie falls below 71 cents U.S. for first time in more than 12 years

The Canadian dollar fell below 71 cents U.S. for the first time in more than 12 years as worries over economic growth in China and geopolitical concerns roiled equity markets worldwide Wednesday.

TORONTO — The Canadian dollar fell below 71 cents U.S. for the first time in more than 12 years as worries over economic growth in China and geopolitical concerns roiled equity markets worldwide Wednesday.

In mid-afternoon trading, the oil-sensitive loonie was down 0.49 of a cent at 70.99 cents U.S. as crude prices continued to fall.

The last time Canada’s dollar was worth less than 71 cents U.S. was in August 2003 as it was recovering from a historic low of 61.79 cents U.S. set in January 2002.

The loonie has been trading progressively lower for some time, partly because of the declining value of crude oil and other commodities, as well as slow economic growth and the U.S. dollar’s rise against most major currencies.

On Tuesday, Bank of Montreal chief economist Douglas Porter told a gathering of leading economists that the loonie could fall below 70 cents U.S. before it begins to recover.

On commodity markets, the February contract for benchmark crude oil was down $1.99 at US$33.98 a barrel, while February natural gas fell seven cents to US$2.25 per mmBtu and March copper shed a penny to US$2.09 a pound.

Gold, seen as a safe haven in times of uncertainty, was up $15.10 at US$1,093.50 an ounce.

In Toronto, the S&P/TSX composite index tumbled 168.36 points to 12,751.78 in what threatened to be its sixth consecutive losing day going back to the post-Christmas holiday weekend.

In New York, the Dow Jones average was down 236.43 points at 16,922.23, while the S&P500 lost 23.19 points to 1,993.52 and the Nasdaq fell 53.94 points to 4,837.49.

In economic news, a monthly survey of China’s service industries slipped to a 17-month low, renewing fears that the second-largest economy in the world was stumbling.

Manufacturing in China has been slowing, and Beijing has been working to make the country’s economy less reliant on trade and investment and to focus instead on more self-sustaining private consumption and services. However, the latest survey raised fears that its service sector may not be strong enough to sustain China’s level of growth.

European markets were also sharply lower, with Germany’s DAX dropping 1.6 per and France’s CAC 40 and Britain’s FTSE 100 both off 1.5 per cent.

Most Asian markets were also lower amid claims by North Korea that it had carried out its first successful test of a hydrogen bomb.

But the Shanghai composite index rebounded 2.3 per cent from its most recent rout as the Chinese government said it will keep some market-stabilizing measures in place.

Just Posted

PHOTOS: Red Deer College Queens host third annual Pink in the Rink game

The RDC Queens picked up an extra special victory on home ice… Continue reading

PHOTOS: The Mustard Seed CEO speaks at Seeds of Hope Gala in Red Deer

The first-ever Seeds of Hope Gala was held at the Red Deer… Continue reading

PHOTO: Renewable Energy Fair at Red Deer College

The Renewable Energy Fair and Workshops event was held at Red Deer… Continue reading

Person airlifted to hospital after collision near Innisfail

One person was airlifted to hospital after a serious collision west of… Continue reading

WATCH: Make-A-Wish grants Star Wars loving teen’s wish

The Make-A-Wish Foundation granted Anakin Suerink’s wish in Red Deer Saturday afternoon

‘Stupid’ law preventing Canada’s re-engagement with Iran: retired envoy

OTTAWA — The real reason the Liberal government hasn’t been able to… Continue reading

Voters head to polls for BC municipal elections today

VANCOUVER — Voters in British Columbia will head to the polls today… Continue reading

All sharks tagged in N.S. expedition can now be tracked on Ocearch website

HALIFAX — All six of the sharks tagged in Nova Scotian waters… Continue reading

Memorial service for former PQ minister Lise Payette today in Montreal

MONTREAL — Mourners will gather to remember former Parti Quebecois cabinet minister… Continue reading

Immunotherapy scores a first win against some breast cancers

For the first time, one of the new immunotherapy drugs has shown… Continue reading

‘Mom I’m in trouble:’ Canadian, Brit face 10 years in jail for alleged graffiti

GRANDE PRAIRIE, Alta. — The mother of a Canadian who was arrested… Continue reading

Coyote on the prowl near Penhold

This coyote was out on the prowl in a field just west… Continue reading

Most Read