Friday March 16, 6:34 pm Eastern Time
CORRECTED - Canadian dollar slides further, could test new lows
In TORONTO story headlined ``Canadian dollar slides further, could test new lows'' please read in the second paragraph...
``versus a close of C$1.5602, or 64.09 U.S. cents on Thursday'' ... instead of ... ``versus a close of C$1.5602, or 64.09 U.S.
cents on Wednesday''... (corrects day)
A corrected repetition follows
Bank of Canada: CANADA OPEN 1.5651 PREVIOUS CLOSE 1.5602
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By Ka Yan Ng
TORONTO, March 16 (Reuters) - The Canadian dollar ended at
fresh 2-1/2 year lows against the U.S. dollar on Friday and risks wading into unchartered territory next week if a slew of domestic indicators are disappointing.
The Canadian dollar closed at C$1.5687 to the U.S. dollar, or 63.75 U.S. cents, versus a close of C$1.5602, or 64.09 U.S. cents on Thursday. It remains just
above its all-time low of C$1.5845, reached in August 1998, in the depths of the world financial crisis of 1997-99.
The Canadian dollar was one of several currencies hit by a flight to the traditional safe haven of U.S. dollar. The yen, the Australian dollar and the New Zealand
dollar were also weak as markets speculated that a downturn in the United States could spread around the world.
``It (the Canadian dollar) is still suffering under the weight of deteriorating expectations of global growth. We're kind of getting dragged down with our association
with the U.S.,'' said Mario Angastiniotis, senior economist at Standard & Poor's MMS.
The Canadian dollar got a bit of early relief from soft U.S. producer price data, but the gains were soon erased. The Canadian currency touched a low of C$1.5690
in intraday trade.
Next week, a heavy slate of domestic indicators could confirm the extent of Canada's sluggish economy. Data include manufacturing, trade, retail sales, and the
consumer price index. If the figures are weak, it will set up the Canadian dollar to test levels not seen since August 1998.
``The pressure would be further exacerbated if the Fed cuts by 75 (basis points). That would essentially mean that the Fed is somewhat panicking and imply that
U.S. growth is actually deteriorating still,'' said Angastiniotis, noting that the market will then start to price in further aggressive easing by the Bank of Canada.
In a Reuters poll conducted on Friday, a paper-thin majority of 13 of 25 primary dealers predicted the Federal Open Market Committee will lower the 5.5 percent
federal funds rate on overnight bank lending by 50 basis points on Tuesday while the rest saw an unusually large 75 basis point cut.
There was also speculation that the Canadian dollar may have been negatively affected also by merger and acquisitions flows from Canadian pipeline and utility
company Enbridge Inc. agreeing to buy Houston-based Midcoast Energy Resources Inc. for $350 million.
Technical analysts at Thomson IFR said the dollar could reach C$1.5740 next week.
In other cross-trading, the Canadian dollar was at C$1.4071 against the euro versus C$1.3985 at the previous session's close. The Canadian dollar was at 78.40
yen, compared with 78.38 yen, and the Australian dollar was at A$1.2891 versus A$1.3003 at the previous close. |
