Skip to main content

The Royal Canadian Mint’s lucky loonie coin.

Jeff McIntosh/THE CANADIAN PRESS

The Canadian dollar closed below parity with the greenback Monday for the first time since early August as hurricane Sandy cast a shadow over global trading with New York equity and bond markets closed.

The loonie closed down 0.28 of a cent at 99.92 cents (U.S.).

There had been plans to allow electronic trading to go forward Monday on the New York Stock Exchange, but with all mass transit shut down in and out of Manhattan, the risks were determined to be too great. The NYSE will remain closed Tuesday.

Story continues below advertisement

The Nasdaq and the CME Group in Chicago were also closed. CME Group's Nymex headquarters and New York trading floor are located in a mandatory evacuation zone in Manhattan. CME's New York trading floor will be closed, but its electronic markets were functioning.

U.S. bond trading will also be closed Tuesday. The Securities Industry and Financial Markets Association called for an early close to bond trading Monday, at 12 noon ET. The yield on the benchmark 10-year Treasury note was 1.72 per cent, compared with 1.75 per cent late Friday.

The New York Stock Exchange and Nasdaq said they intend to reopen on Wednesday and would keep investors updated.

The dollar has lost ground lately amid growing pessimism about the global economic outlook and the commodity-sensitive currency has, in turn, been pressured by falling prices for oil and copper.

Also, "last Friday's decision by Moody's to put six of the Canadian banks on review for a downgrade, noting concerns about high consumer debt levels and elevated housing prices, macro economic risks and capital markets activities, was a reminder of some of the vulnerabilities of the Canadian economic fundamentals," observed Camilla Sutton, chief currency strategist at Scotia Capital.

Ms. Sutton added she continues to be bullish on the Canadian dollar in the medium term and calls the latest slippage a blip.

The dollar has also been pressured by questions about how welcome Ottawa is to foreign takeovers of Canadian resource companies.

Story continues below advertisement

Ottawa has rejected a proposed $6-billion (Canadian) purchase of Progress Energy Resources Corp. by the Canadian arm of Malaysia's state-owned oil company, Petronas.

The Canadian dollar has been pushed higher in the past by big corporate deals.

That's because a foreign buyer acquiring a Canadian company will need Canadian currency to close the deal, boosting demand for the loonie on financial markets.

"We've seen the collapse of the Petronas deal in Canada," added Ms. Sutton.

"So that's important in the sense that it highlights that the rules for foreign takeovers are still a bit uncertain, the appetite for foreign takeovers by state owned entities is less clear, that's also had an impact on Canada."

On Monday, Petronas extended the deadline for its takeover for Progress Energy Resources in the hopes it can convince Ottawa the deal would be of net benefit to Canada.

Story continues below advertisement

Nexen Inc.'s controversial $15.1-billion takeover by CNOOC Ltd. is also being weighed by Industry Canada.

Commodities were lower with the December crude contract closing down 74 cents  (U.S.) to $85.54 a barrel.

December copper lost 6 cents to $3.49 a pound while December gold bullion was down $3.20 to $1.708.70 an ounce.

Report an error
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter