A Canadian dollar coin, commonly known as the loonie, is pictured in this January 23, 2015, file photo.MARK BLINCH/Reuters
The Canadian dollar reached an 11-year low as global economic growth looks set to derail the country's plan for an export-led recovery.
The currency recovered losses to end higher after being dragged down when Norway, another large oil exporter, unexpectedly cut interest rates and said it may ease monetary policy even further. Signs that economic growth in China, the world's biggest commodity consumer, is slowing down have sent prices for everything from oil to copper plunging and prompted speculation demand won't be quick to recover.
"All industrial commodities, not just oil, are at multiyear lows," said Greg Anderson, the global head of foreign-exchange strategy at the Bank of Montreal. "The concern is demand from emerging Asia – not only is it weak now, but it will stay weak."
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the $1 coin, fell as much as 0.7 per cent to $1.3501 per U.S. dollar, the lowest since June 2004. It ended the day up 0.2 per cent at $1.3325 per U.S. dollar. One loonie buys 75.05 U.S. cents.
The global economy is forecast to expand 3 per cent this year, slower than in 2014 and the least since 2009, when most of the world was in recession, according to data compiled by Bloomberg.
Bank of Canada Governor Stephen Poloz, who already cut his own country's benchmark interest rate twice this year, has said he expects exports to take over from consumer spending as the main driver for the next stage of Canada's economic recovery, and non-commodity exports to lead the way with oil prices depressed.