TSX posts solid gain as oil, loonie slide

The Canadian dollar traded below 69 cents U.S. early Friday for the first time since 2003 as crude oil futures dropped below US$30 a barrel and overseas stock markets fell sharply.

Toronto’s main stock index has plunged to its lowest in about three years, while the loonie has dropped to its lowest against the dollar in more than a decade. And the loonie is heavily influenced by the global price of oil, one of the country’s major exports.

“We had a long period of time where the Canadian dollar overshot on the upside when it was trading well above par, and now we are likely trading well below a fair fundamental value”, 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.

“I know that Canadians are looking closely at the price of oil”. “We recognize that those are important indicators for Canadians as they go about considering their situation”. Just before noon ET, it fell to 69.89 cents US, but it later bobbed back above 70 cents U.S.

It was the first time the loonie was below 70 cents USA since the spring of 2003, according to Bank of Canada data.

On Wednesday, the Toronto Stock Exchange’s S&P/TSX composite index lost 203.49 points at 12,170.41, marking its 10th losing day in 11 trading sessions since the Christmas break.

NY also rallied as the Dow Jones rose 227.64 points to close at 16,379.05, the S&P 500 added 31.56 points to 1,921.84 and the Nasdaq gained 88.94 points to close at 4,615.00.

In other commodities, February natural gas declined 13 cents to US$2.139 per mmBtu and February gold lost $13.50 to US$1,073.60 an ounce.