Record one-day fall for Canadian dollar

November 13th, 2008 - 9:07 am ICT by IANS  

Toronto, Nov 13 (IANS) The Canadian dollar suffered the worst one-day loss against the US dollar in its history Wednesday even as the country’s national bank announced to inject $8 billion more into markets to ease credit squeeze.The composite index on the Toronto stock exchange (SX) also lost more than 500 points as prices of metals, commodities and oil continued to tumble.

The loonie or the Canadian dollar fell by a record 2.89 cents US in a day to close at 80.81 cents US. The last time the loonie had dropped sharply against the US dollar was Oct 10 this year when it lost 2.69 cents in a single-day trading.

With no recovery expected in the prices of oil and commodities in the foreseeable future, the Canadian currency is likely to be battered further against the greenback.

Exactly a year ago on Nov 7, the loonie had risen to a historic level of 110 cents US, bringing a cheer to Canadian shoppers and tourists heading down south and gloom to Canadian exporters and manufacturers.

On the Toronto stock market, the mayhem continued Wednesday, with the composite index slipping below the 9,000-mark on falling metals, energy and financial shares.

The index fell by 501.43 points to end the day at 8,922.57 points.

Leading the bearish trend was the metals sector which slipped lower 12.4 percent.

The energy sector too lost 7.5 percent of its value, with stocks of Canadian majors falling steeply.

While Canada Natural Resources stocks fell by 10.8 percent, Petro-Canada and EnCana both went down by 6.1 per cent.

With Canada almost in recession, the Bank of Canada announced to pump another $8 billion into the markets to ease the credit crisis.

This money is in addition to the $20-billion injection already announced by the country’s national bank.

In yet another major step to ease economic woes, Canadian Finance Minister Jim Flaherty also announced Wednesday that the government will buy an additional $50 billion worth of residential mortgages.

This is addition to his last month’s announcement to purchase $25 billion in mortgages.

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