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Canadian dollar drops by a quarter of a cent

The Canadian dollar was down sharply early Wednesday before North American stock markets opened. The loonie traded at 72.08 cents US, down 0.26, or about a quarter-cent from Tuesday’s close.

Canada’s currency has been affected by a number of factors this year, many related to the strength of the American dollar as well as weak global market conditions for key exports such as oil and other commodities.

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The loonie is trading down in tandem with oil, which slipped a further 2.5 per cent on Wednesday on concerns that global inventory levels are continuing to rise.

“The Canadian dollar has most closely tracked oil prices over the last few weeks,” Rahim Madhavji, currency strategist at Knightsbridge Foreign Exchange, said. “A greater buildup of inventory will only serve to weigh on [oil], and resultantly, the Canadian dollar.”
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