OTTAWA -- The Canadian dollar continues to tumble amid fears the Greek debt crisis could spread and derail the global economic recovery.
The loonie fell half a cent in early trading to just below 97 cents US -- its lowest level in two months -- as investors continued to flee to the perceived safe haven of the American greenback.
The latest setback, which follows a 1.39-cent plunge by the loonie on Tuesday, is reminiscent of the late 2008 swoon when the financial crisis took the sails out of most currencies compared with the U.S. dollar despite the fact that most of the problems originated on Wall Street.
Market analysts say the new dynamic likely ends the loonie's assault on parity with its U.S. counterpart for the time being.
RBC currency analyst Matthew Strauss says other than the euro, commodity currencies such as the Canadian dollar are taking the biggest hit versus the greenback.
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Besides the impact on commodity exports, there are also fears that a slowing global recovery could affect the likelihood of the Bank of Canada raising interest rates later this spring.
