Peninsula Daily News news services
VICTORIA — The Canadian dollar dropped to below 77 cents against the U.S. dollar on Friday for the first time since March 2009.
The Canadian dollar seesawed above and below the 77-cent level all day before closing at 77 cents U.S. when stock markets closed.
A cheaper “loonie” makes it more attractive for Americans to come shopping in Canada.
It also makes it less worthwhile for Canadians to shop across the border — which can mean more Canadians shopping locally.
It now costs Canadians $1.30 to get a U.S. dollar.
The loonie started falling on Wednesday after the Bank of Canada cut its key interest rate to 0.5 per cent.
“It’s a perfect storm of events that’s sinking the Canadian dollar,” Adam Button, a currency analyst with ForexLive.com, told CBC News in an interview.
He cited the collapse in oil prices that began last summer and the soaring value of the U.S. dollar.
“Almost at the exact same time as the Bank of Canada cut [rates], the Federal Reserve was talking about hiking rates,” added Button. “The
U.S. and Canadian economies are wildly diverging at the moment.”
The Canadian dollar could plunge even lower, Button warned.
He sees the loonie “on the brink of an 11-year low,” falling as low as 73 cents against the U.S. dollar in the next month.
