By Chris Fournier
Nov. 28 (Bloomberg) -- Canada’s currency weakened as commodities, European stocks and U.S. equity-index futures fell, reflecting concern that global economic growth will slow.
“Risk aversion is dominating trading, whether we look at equities or commodity-based currencies,” said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto. “We can look at oil prices and all the other commodities declining and that’s adding some weight.”
The Canadian dollar weakened as much as 1 percent to C$1.2436 per U.S. dollar, from C$1.2316 yesterday. It traded at C$1.2388 at 8:07 a.m. in Toronto. One Canadian dollar buys 80.71 U.S. cents.
Canada’s dollar, dubbed the loonie for the aquatic bird on the one-dollar coin, is poised for its sixth straight monthly drop, the longest losing streak in 15 years.
Oil dropped below $50 a barrel last week, after reaching a record $147.27 in July. Crude accounts for 21 percent of the Bank of Canada’s Commodity Price Index, the largest single component. It dropped 1.3 percent today to $53.71.
The MSCI World Index declined 0.4 percent to 881.32. The gauge of stocks in 23 developed nations is headed for a decline of 7.9 percent in November.
Political uncertainty is also weighing on Canada’s currency, according to Strauss. Promises by the country’s opposition parties to fight Prime Minister Stephen Harper’s proposed spending cuts may bring down the minority Conservative Party government.
To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net
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