Commodity Declines Visible Through Canadian Dollar

US dollar hoarding, depressed monetary outlooks and lower commodity prices continued to weigh on the Canadian dollar as the loonie traded through to multi year lows during both London and New York. Compared to the 1.2136 New York close, the currency is now lower against the greenback at 1.2532, just a couple pips shy of 400 for the day. The surge against the Canadian currency was bolstered through the session, in particular by depressed commodity prices as several key base materials showed considerable weakness on the session. Notably, crude oil, which has an existing correlation with the currency, fell to a 15-month low during the session. Currently, front month contracts are trading lower by 6.18 percent down $4.46 to $67.72 a barrel. The two day slide will now all but insure that OPEC leaders are likely to cut production by a market consensus of 1 million barrels a day when they meet this week. Additional cuts will likely be pushed back further in 2009, with estimates surrounding the 500,000 barrel a day mark. Gold and copper futures were also lower as both contracts were trading lower by 3 percent or more heading in the New York afternoon.