The Canadian dollar came close to falling below 68 cents US in overnight trading amid further pressure on oil prices and uncertainty about what the Bank of Canada will do in response to weakened economic conditions.
The loonie was at 68.35 cents US, about a third of a cent below Tuesday's close just before North American stock markets open at 9:30 a.m. ET. The Bank of Canada's latest interest rate announcement follows at 10 a.m. ET.
Earlier, Canada's dollar traded at 68.07 cents US — the lowest since April 2003.
North American stock markets were poised to open lower. On Tuesday, the Toronto Stock Exchange's S&P/TSX index ended the session up 60.07 points at 12,002.24 — only the third positive day since the Christmas break.
Oil was changing hands at $29.10 US, down by about half a cent, which weighed heavily on the loonie and other currencies as well as oil company stocks.
Equity markets also were taking a beating, with major indexes in Japan and Hong Kong falling nearly four per cent before they closed. Major European indexes were down three per cent in the midst of their trading sessions.
"A return to the template of an overnight Chinese sell-off has dented European optimism, causing markets to tumble. The aggressive nature of this morning's sell-off highlights how fragile confidence in 2016 has been," wrote Alastair McCaig, market analyst at online trading firm IG.
"Oil remains below $29 a barrel and looks more inclined to test the limits of how low it can go, rather than find any traction regardless of the consequences. Oil's price action...has given the mining sector and energy stocks all the excuse they need to slump once again."
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