Canadian dollar below 72 cents for first time in 11 years

The Canadian dollar continued its fall from grace yesterday, closing at 71.6 cents U.S. – the first time it has dropped below 72 cents since May 2004.

Just last week the loonie hit a new low, dropping below 73 cents. An uncertain American economy, and the continuing drop in the price of oil, gas, and other resources has kept the Canadian dollar on a steady decline.

It’s a far cry from last year, when the Canadian dollar was valued at 94 cents U.S. on December 20.

The continuous drop in the Canadian dollar is causing U.S. businesses to gravitate more of their operations north of border, such as the Hollywood film industry. It is also bringing more American tourists to Canada, but at the same time it is putting a strain on Canadian consumers, especially this close to the holiday season, due to higher prices.

Much of the loonie’s grief can be attributed to the price of oil, which oil and commodities website Oil-Price.net puts at $35.52 per barrel – less than half what it sat at this time last year. Over the past year, demand for natural resources in China has fallen significantly.