Canada's Dollar Falls for Third Day as Oil Touches 20-Month Low

By Chris Fournier

Nov. 12 (Bloomberg) -- Canada's currency dropped for a third day against its U.S. counterpart, the longest losing streak in three weeks, as oil fell to the lowest in 20 months.

Canada's dollar has weakened 12 percent this quarter, during which time crude has plunged 42 percent. Oil accounted for a tenth of Canada's export revenue last year.

``The ongoing slide in commodity prices, which doesn't seem to be showing any letup, is weighing most particularly on the Canadian dollar,'' said Doug Porter, deputy chief economist with BMO Capital Markets in Toronto, who predicts the Canadian currency will weaken to C$1.25 by year-end.

The Canadian currency fell as much as 0.6 percent to C$1.2149 versus the U.S. dollar, from C$1.2073 yesterday. It traded at C$1.2125 at 8:21 a.m. in Toronto. One Canadian dollar buys 82.48 U.S. cents. The currency declined during four days in the period ended Oct. 22.

Crude for December delivery touched $57.70 a barrel in electronic trading on the New York Mercantile Exchange, the lowest since March 20, 2007. Prices have tumbled 61 percent since reaching a record $147.27 on July 11.

``Oil prices are below $60 while longer-term oil price futures are also continuing to lose altitude,'' said David Watt, a senior currency strategist at RBC Capital Markets in Toronto. ``The global backdrop that sparked the October moves has not changed and is again weighing on commodity and cyclically sensitive currencies.''

To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net