SF: Canada's Dollar Decreases to Lowest Level in Almost Two Weeks
May 19 (Bloomberg) -- Canada's dollar dropped to the lowest level in almost two weeks as concern Europe's sovereign-debt crisis will worsen sparked a selloff in stocks, commodities and currencies tied to growth.
The Canadian currency, which traded stronger than parity with the greenback last month, has dropped 2.8 percent in May on speculation the Bank of Canada may not raise its target rate for overnight lending at its next meeting. Crude oil, the nation's largest export, dropped for a seventh straight day.
"Everything is melting down," said Blake Jespersen, director of foreign exchange in Toronto at Bank of Montreal, the nation's fourth-largest lender. "We don't think they're going to hike in June if things continue to unfold this way."
The Canadian currency slumped as much as 1.2 percent to C$1.0518 per U.S. dollar, the weakest level since May 7, when it touched C$1.0571. It declined 0.8 percent to C$1.0478 at 7:47 a.m. in Toronto, from C$1.0393 yesterday. One Canadian dollar buys 95.71 U.S. cents.
Crude oil for June delivery fell 1.6 percent to $68.31 a barrel on the New York Mercantile Exchange. Futures on the Standard & Poor's 500 Index slipped 0.6 percent.
The loonie, as Canada's currency is known for the image of the aquatic bird on the one-dollar coin, tends to fluctuate along with equities and commodities as a proxy for risk.
