Text size:

  • Small
  • Normal
  • Large
The Canadian dollar is down 1.1 per cent in the fourth quarter versus nine developed-nation peers tracked by Bloomberg. Mark Blinch / Reuters
The Canadian dollar is down 1.1 per cent in the fourth quarter versus nine developed-nation peers tracked by Bloomberg. Mark Blinch / Reuters

Falling Canadian dollar is playing loonie tune

What's Down: Canada's dollar is diverging from other commodity currencies as the decade-long boom in raw materials is bogged down by falling energy prices and resistance to oil pipeline-expansion plans.

The Canadian dollar is diverging from other commodity currencies as the decade-long boom in raw materials that has fuelled growth is bogged down by falling energy prices and resistance to oil pipeline-expansion plans.

The loonie, as the currency is known for the image of the aquatic bird on the C$1 coin, is down 1.1 per cent in the fourth quarter versus nine developed-nation peers tracked by Bloomberg, while the currencies of Australia, New Zealand and Norway are all higher. Against its United States counterpart, the loonie has dropped 0.2 per cent since September.

Provinces with commodity-driven economies, including British Columbia and Alberta, are feeling the effect of weakness in a range of resource exports from oil to natural gas and potash.

Stephen Harper, the prime minister, said this month that Canada, which has the world's third-largest pool of crude-oil reserves, will not approve foreign state-owned firms taking controlling interests in oil-sands projects barring exceptional circumstances, limiting the scope for future investment.

"It's a bit perplexing why the Canadian dollar has not kept up with these other commodity currencies," said David Tulk, the chief macro strategist at Toronto Dominion Bank's TD Securities unit. "People are coming to terms with the fact that some of Canada's commodity potential is still bottled up, just looking at some of the infrastructure issues with the pipeline system."

The Canadian dollar had gained 42 per cent against its US counterpart from 2000 to 2011, when oil rose to 18 per cent of exports from 5 per cent, according to Statistics Canada. The country's GDP grew 163 per cent in the same period.

In early trading in London yesterday, the loonie was little changed at 98.60 cents per US dollar. One Canadian dollar buys $1.0142.

* Bloomberg News

Back to the top

More articles


Editor's Picks

 Would you like it in blue? An Afghan shopkeeper shows a burqa to a customer at a bazaar in Herat. (Aref Karimi / AFP /  April 13, 2014)

In pictures: Best business images for the week to April 24, 2014

Here are some of the best business images for the week to April 24, 2014.

 That's asking a lot: this four-bedroom duplex penthouse apartment  at Marina Residence in Dubai is for sale with an asking price of Dh15.7 million. (Courtesy Better Homes / April 2014)

In pictures: Palm Jumeirah penthouse listed for Dh15.7 million

A four-bedroom duplex penthouse in Marina Residence 3 on Dubai's Palm Jumeirah is on the market for Dh15.7 million.

 Room with a view from one of the 21 duplex penthouses located in the Gate Towers sky-bridge. The sports courts and swimming pools can be seen below. Courtesy Alda

In pictures: Aldar’s Gate Towers Penthouse Collection on Reem Island

Aldar launched its Gate Towers Penthouse Collection at Cityscape Abu Dhabi. The launch features 21 penthouses spanning the skybridge, with each having a private indoor pool and incredible views.

 Marina Square apartments Reem Island: Q1 2% rise. Studio - Dh65-68,000. 1BR - Dh75-95,000. 2BR - Dh110-145,000. 3BR - Dh170-190,000. Q1 2013-Q1 2014 no change. Sammy Dallal / The National

In pictures: Where Abu Dhabi rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Abu Dhabi have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National