By Chris Fournier Oct. 22 (Bloomberg) -- Canada's currency dropped to the lowest since June 2005 as commodities including crude oil fell and on speculation the country's central bank would extend interest-rate cuts in the face of slowing economic growth. The loonie, as the currency is known because of the aquatic bird on the one-dollar coin, has depreciated 15 percent so far this month. ``It's a question of not catching a falling knife,'' said Samarjit Shankar, director of global strategy for the foreign- exchange group in Boston at Bank of New York Mellon, the world's largest custodial bank. ``The Canadian dollar especially is being weighed on by the outlook for monetary policy, and combined with the continued softness in oil prices and the concerns about global growth, the loonie is taking the brunt of it.'' The Canadian dollar weakened 2.8 percent to C$C$1.2480 per U.S. dollar at 7:58 a.m. in Toronto, from C$1.2141 yesterday. It earlier touched C$1.2512, the weakest since June 15, 2005. One Canadian dollar buys 80.13 U.S. cents. The Bank of Canada yesterday cut the cost of borrowing by 25 basis points to 2.25 percent, and said further easing may be required. Crude oil dropped to as low as $68.90 a barrel today. A government report is forecast to show retail sales dropped 0.3 percent in August, from a 0.1 percent increase during July, according to the median forecast of 20 economists surveyed by Bloomberg News. Statistics Canada will release the report at 8:30 a.m. in Ottawa. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

Source