Canada Dollar Falls Most in 4 Months on Rate-Bias Tilt, Oil Drop

The Canadian dollar fell the most since June after the Bank of Canada abandoned a leaning toward higher rates and crude oil dropped below $100 a barrel for the first time since July.

The currency weakened versus the majority of its 16 most-traded peers for a fourth week as a more accommodative policy by the Bank of Canada announced Oct. 23 followed a Sept. 18 decision by the Federal Reserve to sustain the pace of bond purchases to engineer a stronger economic recovery. Canada’s economy may have expanded 1.7 percent in August from a year earlier, according to the median in the Bloomberg News survey of economists before the Oct. 31 Statistics Canada report.

“There’s two factors at work, the Bank of Canada and industrial commodity prices,” Greg Anderson, head of global foreign exchange strategy at Bank of Montreal, said by phone from New York. “We haven’t seen oil prices this low in a long time.”

The loonie, as Canada’s dollar is known for the image of the waterfowl on the C$1 coin, added 1.6 percent this week to C$1.0448 per U.S. dollar in Toronto. It reached C$1.0461, the weakest level since Sept. 6. One loonie buys 95.71 U.S. cents.

BMO’s three-month forecast is for the currency to weaken to C$1.06, Anderson said.