Loonies are pictured in Vancouver on Sept. 22, 201JONATHAN HAYWA
The Canadian dollar closed at a 5 1/2-year low Thursday amid declining prices for oil and gold and a greenback that strengthened following a solid U.S. retail sales report.
The loonie slipped 0.36 of a cent to end at 86.75 cents (U.S).
U.S. retail sales perked up in November with the start of the holiday shopping season, rising 0.7 per cent, led by online buying and purchases of autos, clothing and electronics.
Oil prices fell below $60 to a fresh five-year low on top of a $3 slide Wednesday after the Organization of Petroleum Exporting Countries cut its forecast for global demand for the cartel's oil. On Thursday, the January crude contract on the New York Mercantile Exchange dropped 99 cents to $59.95 a barrel.
Metal prices were mixed with February gold bullion down $3.80 to $1,225.60 an ounce while March copper edged up 3 cents to $2.92 a pound.
The Canadian dollar has moved steadily lower in recent weeks as traders try to assess the damage that will be caused to the Canadian economy by oil prices that have fallen about 40 per cent since the summer. The fall has been sparked by lower demand prospects and an overabundance of crude oil, large the result of surging shale production in the U.S. and a refusal by OPEC to cut production to support prices.
"Oil prices reached fresh lows ... in a relentless drop, which will weigh on domestic growth," said Camilla Sutton, chief fopreign exchange strategist at Bank of Nova Scotia.
"Canadian equities continue to underperform, warning that there is likely domestic and foreign selling, and therefore selling of the Canadian dollar."
Sutton added in a commentary that she expects weakness in the Canadian dollar to carry on into 2015.
Also pressuring the loonie are questions about whether economic weakness due to falling oil will see the Bank of Canada putting off rate hikes even further. Economists have been looking for the bank to move late next year.