TORONTO – The Canadian dollar was lower Friday amid doubts about whether the U.S. can avoid going over the so-called fiscal cliff in a matter of days, a development that could put the United States on course for another recession.
The loonie was down 0.07 of a cent to 100.44 cents US as traders avoided riskier assets including resource-based currencies and commodities and bought into the safe-haven status of the American dollar.
The fiscal cliff scenario involves the automatic imposition of huge spending cuts and significant tax increases due to take effect at the beginning of the year. With the U.S. recovery already weak, economists worry that the American and other economies could be dragged down if the measures are allowed to persist.
Congressional leaders and President Barack Obama are expected to meet later Friday at the White House for last-minute talks. Obama and congressional Democrats want a deal that would let tax rates rise for the wealthiest taxpayers, a measure opposed by Republicans.
Commodities were generally lower with February crude on the New York Mercantile Exchange down 27 cents to US$90.60 a barrel.
March copper was unchanged at US$3.60 a pound while February gold declined $7 to US$1,656.70 an ounce.