The Canadian dollar closed lower Tuesday, hitting a fresh, seven-month low during the day amid worries centred on fears of massive U.S. government spending cuts, the housing market and oil prices.
The Canadian dollar fell 0.56 of a cent to 98.83 cents US after going as low as 98.65 cents US.
The dollar has not had a good start to 2013, falling more than 1.5 cents US. Analysts say there is more than one issue putting pressure on the Canadian currency. For starters, there’s the looming sequester in the U.S., Canada’s biggest trading partner. That is a huge package of across the board spending cuts worth US$85 billion that are set to take effect at the end of the month unless lawmakers can agree on other cuts. It would cut a big chunk out of American economic growth, a worrisome prospect for an economy struggling to put in growth of even two per cent and bad news for an export-driven economy like Canada’s.