Oil briefly dips below US$30; loonie also drops

At mid-afternoon, the loonie was off 0.05 of a US cent at 69.66 cents USA, hovering near 13-year lows.

West Texas Intermediate oil, a benchmark crude which sold at US$105 in June 2014, dipped below US$30 a barrel Tuesday.

“I lived through the financial crisis of 2008, and I can tell you, this is not 2008”, Alexander said on CTV’s Canada AM on Wednesday.

The S&P/TSX composite index lost 203.49 points to finish at 12,170.41.

The loonie, as the currency is called for the aquatic bird on the C$1 coin, traded at 69.98 USA cents at 11:57 a.m.in Toronto, or C$1.4290 per US dollar.

Energy stocks retreated 3.95 percent after crude oil prices plummeted Monday as markets expected uncertainties in global demand.

The Canadian dollar reached an all-time low in January 2002 when it was at 61.79 cents per USA dollar.

But oil prices are not the only factor.

Canadian oil fared even worse, with a barrel of the oil blend from Alberta’s oilsands known as Western Canada Select trading at under 17 US dollars per barrel, its lowest level on record.

“We are playing close attention to the state of the Canadian dollar”, federal Finance Minister Bill Morneau said at a news conference shortly after the Bank of Canada close.

“The risk markets, near term, are still going to be paying closest attention to the price of oil”, said Mark Heppenstall, chief investment office of Penn Mutual Asset Management in Horsham, Pa., in remarks to Reuters.

And the loonie is heavily influenced by the global price of oil, one of the country’s major exports. Analysts had predicted that exports would fall by eight per cent.

The Bank of Canada has cut interest rates twice over the past year, and some market watchers are anticipating another cut next Wednesday.

Experts in the food industry believe that the further weakening of the Canadian dollar will lead to a surge in food prices. That’s quite a change from its previous forecast – issued just three months earlier – in which ATB was projecting economic growth of 1.4 percent for Alberta in 2016.