Loonie Declines with Commodities and US Consumer Confidence

The Canadian dollar slumped today against the US dollar after crude oil and other commodities declined and the US consumer confidence deteriorated, damping the demand for the currencies tied to the economic growth.

The Dow Jones Industrial Average fell 0.6 percent and the MSCI Global Index of equities dropped 0.5 percent. November delivery for crude oil went down 0.5 percent to $82.25 per on NYMEX. The Preliminary Reuters/University of Michigan Consumer Sentiment unexpectedly fell from 68.2 to 67.9, while the increase to 68.8 was forecast.

The loonie became today on of the three worst-performing currencies among majors. That happened because of the rapid sell-off of the US equities after the Federal Reserve Chairman Ben Bernanke signaled in his speech today about next round of the quantitative easing, according to some analysts.

USD/CAD surged from 1.0037 to 1.0117 as of 20:32 GMT today after it dropped to the intraday low of 1.0013. EUR/CAD traded near its opening level of 1.4137 after it fell as low as 1.4087 and rose as high as 1.4202.

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