The Canadian dollar was whacked to its lowest level versus the US dollar in more than three years on Wednesday as softer oil prices and a surge in the greenback combined to knock the currency below 80 US cents. Bond prices closed higher across the curve as the latest data out of Canada, including the August retail sales report, missed estimates, while the equity market resumed its slide and prompted investors to snap up more secure government debt.
The Canadian dollar closed at C$1.2547 to the US dollar, or 79.70 US cents, down 3 percent from C$1.2137 to the US dollar, or 82.39 US cents, at Tuesday's close. During the session, the Canadian currency dropped as low as C$1.2600 to the US dollar, or 79.36 US cents, a move blamed largely on a stronger greenback as investors liquidated riskier assets. Lower oil prices also played a role. "Stand out of the way of this freight train," said Steve Butler, director of foreign exchange at Scotia Capital. "You just cannot call an end to this move at this moment or a bottom for the Canadian dollar."