Canadian dollar sinks near 80 cents oil at 45

TORONTO — The Canadian dollar drifted closer to the 80-cent US level Monday morning as the American currency strengthened ahead of this week’s interest rate meeting by the U.S. Federal Reserve.The loonie declined 0.2 of a cent to 80.29 cents US.The currency tumbled 3.5% last week to its weakest level in six years after the Bank of Canada surprised markets last week with a quarter-point cut in its key overnight rate to 0.75%.The U.S. Federal Reserve is holding its interest rate meeting on Wednesday. The Fed has been widely expected to start moving rates away from near zero around the middle of this year and traders will be looking for any sign that the central bank could move earlier.West Texas Intermediate (WTI) crude for March delivery was at $45.94 a barrel, up 35 cents. Front-month WTI had touched an intraday low of $44.35, just above the $44.20 hit on Jan. 13, which was its lowest level since April 2009.Other major data points this week include the latest economic growth figures for Canada and the U.S.Economists expect that Canadian gross domestic product grew a slight 0.1% during November, reflecting disappointing reports for manufacturing and wholesale sales. Oil prices started to collapse at the end of that month and analysts note that future GDP reports will detail how that decline is affecting the economy.Prices have fallen more than 40% since the end of November when Saudi Arabia rejected calls to cut production in order to support prices. Overall, prices are down about 55% from the highs of last summer as the marketplace works through a huge imbalance in supply and demand.On Monday, the March crude contract in New York gained 25 cents to US$45.84 a barrel.In the U.S., fourth quarter GDP is expected to come in at an annualized rate of 3.1%, down from a five% pace in the third quarter.Elsewhere on commodity markets, February bullion faded $9.80 to US$1,282.80 an ounce while March copper added a cent to US$2.51 a pound.Markets also considered the future of the eurozone after Greece’s anti-austerity opposition party won a big victory in national elections over the weekend.The Syriza Party managed to win 149 seats, just one short of a majority, but managed to quickly form a coalition with a small right-wing party that signals possible confrontation over the country’s bailout.Syriza party leader Alexis Tsipras has promised to renegotiate Greece’s massive bailout agreements, but has vowed not to take any unilateral action against lenders from other eurozone countries.

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