Calgary Alberta Mortgage and Real Estate News

The Canadian dollar declined from a six-week high on speculation an economic slowdown in the U.S. will curb growth in Canada.“We’ve seen the highs in the Canadian dollar,” said Matthew Strauss, senior currency strategist in Toronto at RBC Capital Markets Inc. “The central bank will cut interest rates again in the first quarter. A U.S. slowdown will hit Canada eventually.”

The currency fell 1.3 percent to 99.41 Canadian cents per U.S. dollar at 4:08 p.m. in Toronto. The currency touched 97.57 cents on Dec. 28, the strongest since Nov. 20. One Canadian dollar buys $1.006. The currency rose to an all-time high of 90.58 Canadian cents per U.S. dollar on Nov. 7, and gained 17 percent this year.

Bank of Canada Governor David Dodge said on Dec. 21 that the country faces a greater risk of recession now than it did six months ago, as growth slows around the world and the risk of a “disorderly” adjustment increases.

Canada’s central bank unexpectedly lowered the benchmark borrowing cost a quarter-percentage point to 4.25 percent on Dec. 4 in a bid to bolster growth. The central bank will cut the rate to 4 percent at the next policy meeting on Jan. 22, according to the median forecast in a Bloomberg News survey.

The Canadian currency’s gain this year was its biggest since 2003, as advancing commodity prices boosted the country’s exports and pushed the unemployment rate to three-decade lows. The Canadian dollar had the second-biggest advance among the 16 most-actively traded currencies, trailing only Brazil’s real, which gained 20 percent.

Oil, Gold

Commodities such as crude oil and gold account for half of Canada’s exports. Oil prices rose 57 percent this year to about $96 a barrel, for the biggest annual percentage gain since 2002. Gold rose 31 percent this year, the seventh straight annual gain.

Hedge funds and other large speculators last week trimmed their bets that the Canadian currency will gain against the U.S. dollar by 37 percent, figures from the Washington-based Commodity Futures Trading Commission showed on Dec. 28. The wagers betting on the currency’s gain outnumbered those on the decline by 14,723 as of Dec. 25.

The currency may decline to C$1.06 per U.S. dollar by the end of next year, according to the median forecast in a Bloomberg News survey of 40 analysts.

The yield on Canada’s 4.25 percent two-year government bonds due December 2009 fell 4 basis points, or 0.04 percentage point, today to 3.74 percent. The price rose 7 cents to C$100.93.