Loonie sinks to 15-month low

The loonie dropped to its lowest level in 15 months on Thursday amid economic data suggesting the Canadian economy is merely crawling and as commodity prices continued to tumble.

The Canadian dollar finished the day above 93 cents US after an earlier droop to 92.44 cents, its lowest level since late May 2007, when the currency began its vertiginous spiral upward to a peak of $1.10 US.

The dollar was battered as Statistics Canada released figures showing that Canada’s trade surplus declined in July and the market for new houses was cooling.

The national trade surplus fell to $4.9 billion in July from a revised $5.6 billion the month before, Statistics Canada said. Meanwhile, the growth in prices for new homes nationwide decelerated for the sixth consecutive month, to 2.7 per cent year-over-year.

“Net exports are going to continue to weigh on growth for the economy because exports are just growing a lot less quickly than imports are,” said Douglas Porter, an economist with BMO Capital Markets.

Also Thursday, commodity prices, seen as a prime factor in valuing the Canadian currency, continued their retreat. Crude oil futures closed at $100.87 US a barrel in New York, down $1.71, while gold futures were off $17 to close at $745.50 US an ounce. Both have nosedived from their peaks earlier this year above $147 a barrel and $1,020 an ounce.

With files from the Canadian Press

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