The Canadian dollar fell to the weakest level against the U.S. dollar in more than 18 months after crude oil and commodity prices fell significantly on speculation that the global demand will decline.
This week showed traders the fastest decline of the Canadian dollar against its U.S. counterpart — it lost more than 7.3 percent in three and a half days so far. Last week it depreciated about 4.5 percent, which was also an untypical single week decline for the Canadian currency.
The economy of Canada is largely commodity export-orientated, with U.S. being Canadas biggest trade partner. With such a strong dependence on the oil export, a rapid decline of the crude prices couldnt leave the Canadian dollar intact.
November oil futures falling to as low as $82 arent helping the Canadas economy. Currency analysts believe that the CAD will continue to depreciate for as long as the oil prices decline and those will decline if the crisis continues to plague the global financial markets.
USD/CAD rose from 1.0839 to 1.1634 this week as of 8:19 GMT today; it reached its highest value since March 20, 2007 today at 1.1647.
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