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article imageLoonie Hits 15 Month Low

By Bob Ewing     Sep 11, 2008 in Business
The loonie is taking a dive and is hitting a 15 month low; economic data suggesting Canada's economy is crawling blamed.
Commodity prices are tumbling, the economy crawling and the loonie has hit a 15 month low. This is not good news for the federal government during an election.
The loonie ended 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 Canadian dollar tool a dive 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 last month.
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.
Commodity prices which are 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 dropped from their peaks earlier this year above $147 a barrel and $1,020 an ounce.
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