Canadian dollar tumbles to below 88 cents as oil prices slump

TORONTO — The Canadian dollar was at a four-year low Tuesday as the resource sensitive loonie was pressured by oil prices at three-year lows while trade data showing an improvement in Canada’s trade balance with the rest of the world.The loonie was down 0.43 of a cent to 87.62 cents US as Statistics Canada reported the trade balance moved to a surplus of $710 million compared to a deficit of $463 million during August.Merchandise imports declined 1.5% in September amid declines in energy and mineral product shipments.Exports rose 1.1%, led by the vehicle sector.A lower loonie has helped manufacturers, and hurt almost everyone elseLoonie could fall to $0.82 against the greenback early next year: CIBCSaudi Arabia just cut the price of crude again — and oil is crashingThe slide in the loonie came on the heels of a drop of 2/3 of a U.S. cent Monday following dovish comments by Bank of Canada governor Stephen Poloz. The December crude contract in New York was off early lows but still down $1.38 to US$77.40 a barrel after Saudi Arabia cut prices to its U.S. customers.Analysts say the move added to speculation that Middle East producers are working to defend market share amid surging U.S. output.Prices have also been pushed downward by U.S. dollar that has gained in strength lately as the U.S. Federal Reserve’s quantitative easing program concluded at the end of October. Crude prices could come under further pressure during the session as the American Petroleum Institute will publish data that will likely show a further increase in U.S. oil supplies.Other commodity prices also declined Tuesday morning with December copper down five cents to US$3.02 a pound while December gold was down $2.50 to US$1,167.30 an ounce.Investors also took in data showing the eurozone economy in precarious shape.The European Commission has cut its growth forecast, saying growth will come in at 0.8% this year, down from 1.2% growth it forecast this spring. read more