NewsAlert:Oil dips below US$30 a barrel

David Doyle was among the first to predict the drop in the CAD to USD exchange rate, calling for the Canadian dollar to drop to US$0.70 a year ago.

The Canadian dollar dipped to a 13-year low Tuesday, closing for the day below US$0.70.

Canada is a major oil producing country and oil prices have plummeted.

At the same time the loonie has fallen, the greenback has surged against numerous currencies, including Canada’s, as its economy gains strength.

Sid Mokhtari, a technical analyst at CIBC Capital Markets says he’s seen the relationship between plunging oil prices and the loonie grow stronger in recent weeks, a trend he believes could push the currency lower.

“The U.S. dollar becomes a refuge, and that’s what we’ve seen in the last few days”, he said.

The falling dollar and price of oil prompted questions for Finance Minister Bill Morneau, who was in Montreal on Tuesday for pre-budget consultations.

West Texas crude has flirted with price levels below $30 for for some Canadian crude barrels the price is already at $20.

This is also bad news for Canadian shoppers, Bloomberg said.

It mostly traded below 70 USA cents between 1997 and 2003, a period when manufacturing made up a larger part of exports than oil.

“I really think there is a good chance that we will pierce that [70 cent USA level], and in a sustainable way go lower”, he told BNN.

The Dow Jones was down 96.97 points at 16,419.25, the S&P 500 index slipped 11.07 points at 1,927.61 and the Nasdaq dropped 38.538 points to 4,295.18.

The February contract for benchmark crude fetched US$31.41 a barrel on Monday.