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To: Gary who wrote (16508)	8/25/1998 1:32:00 PM
From: Alex	Respond to of 116764

Analysts predict plunging loonie has yet to hit rock bottom By Lisa Wright Toronto Star Business Reporter The dollar just can't seem to get out of the doldrums. The unlucky loonie fell to yet another record low yesterday of 64.55 cents (U.S.), down 0.31 of a cent from last Friday's dreadful day of trading. And brace yourself: Analysts predict it hasn't quite hit bottom. ''We will remain under pressure this week,'' predicted Katherine Beattie, technical analyst at Standard & Poor's MMS. ''We're looking for a minimum 64 cents (U.S.), and it could go lower than that,'' she said. It hit an all-time trading low early yesterday of 64.50 cents, so it doesn't have far to fall, Beattie noted. Financial turmoil in Russia and Latin America prompted investors yet again to shun Canada's currency for the safe-haven of the U.S. dollar. ------------------------------------------------------------------------ Foreign stocks popular ------------------------------------------------------------------------ Russian President Boris Yeltsin had an impact on events over the weekend by firing his entire cabinet for the second time in five months to try to stabilize Russia's shaky economy. Financial woes also continue to plague Asia and Latin America, where rumours of the devaluation of the Venezuelan peso continue to affect that country's economy. Both Russia and Venezuela are exporters of key commodities - oil and nickel - and their financial crises were seen as reason to sell the commodity-based Canadian dollar. Meanwhile, Prime Minister Jean Chr‚tien reiterated yesterday that it's not his job to rescue the plunging loonie. The Bank of Canada, which sets the country's monetary policy, decides what to do about the dollar, he said. ''The governor of the Bank of Canada is intervening in the market sometimes,'' Chr‚tien said. ''It's his job. It's not for me to tell him what to do.'' And intervene Gordon Thiessen did. The Bank of Canada stepped in a number of times yesterday to prop up the currency by buying up loonies with its huge reserve of American dollars, but it wasn't enough to stop the continued fall. ------------------------------------------------------------------------ Discuss the falling dollar ------------------------------------------------------------------------ The central bank has intervened regularly for the last two weeks in a bid to halt the decline in the dollar. Though the strategy seems to be having little success, some economists are thankful the central bank hasn't hiked interest rates - a move they fear will stop consumer spending and spark a recession. The amount of rate hikes needed to boost the dollar would be too substantial - at least one percentage point - to even justify doing it, said Jeff Rubin, chief economist with CIBC-Wood Gundy. <Picture: [Speak Out]> ÿ www2.thestar.com