TORONTO—The Canadian dollar on Dec. 7 fell more than half a U.S. cent to levels not seen in 11 years as crude oil futures traded below US$39 a barrel.
The loonie traded at 74.13 cents U.S. shortly after North American stock markets opened after falling 0.63 cents from Friday’s close. The dollar last closed below 74 cents U.S. on June 23, 2014.
The January contract for crude oil futures was down $1.24 at US$38.72 per barrel, approaching lows last seen in August.
Currency analyst Colin Cieszynski says crude prices and Canada’s dollar are being dragged down by last week’s meeting of the OPEC cartel, which signalled members won’t likely reduce output below 31.5 million barrels per day for at least six months.
“Members decided to hold off on a production decision until their June meeting to give time to see what production level Iran will actually be at when it returns to the market in 2016, and to account for Indonesia rejoining OPEC,” Cieszynski wrote in a note to clients.
Iran has been ramping up production since sanctions against it were lifted in return for curbing nuclear activities under an agreement in July with the United States, Britain, France, Germany, Russia and China.
Indonesia left OPEC in 2008 but said in June that it wants to rejoin the cartel to forge a closer relationship with oil suppliers.