TORONTO (Reuters) – The Canadian dollar hit fresh 12-month lows against the U.S. dollar on Friday to notch the largest monthly drop in value since the height of the 2008 financial crisis as global growth concerns dominated.
Global stocks were set to close their worst quarter in nearly three years, weighed by nagging concerns about the world economy and the lack of a credible solution to Europe’s debt crisis, The euro and most commodity prices also fell as investors’ search for safety drove up U.S. government bonds and the dollar.
Adding to a string of global data that has crushed growth-related assets in the past three months, China’s manufacturing sector contracted for a third straight month in September while German retail sales slid at their sharpest pace in more than four years.
The gloom helped push the Canadian dollar more than a cent lower to hit its weakest point since September 2010. Based on Bank of Canada closing levels, the currency lost 6.6 percent in September — the biggest monthly drop since October 2008 — and nearly 8 percent in the third quarter.
“The high correlation with weakening commodities and overall global growth concerns are hurting the Canadian dollar. Now it’s a bit of a snowball effect with people getting out of longer-term positions as well and seeking safe haven in U.S. dollar,” said John Curran, senior vice president at CanadianForex, a commercial foreign exchange dealing firm.
The Canadian dollar ended the session at C$1.0482 to the U.S. dollar, or 95.40 U.S. cents, down from Thursday’s North American close at C$1.0366 to the U.S. dollar, or 96.47 U.S. cents.
The currency at one point hit C$1.0504, or 95.20 U.S. cents, its weakest level since September 8, 2010.
The currency, which slipped below parity with its U.S. counterpart last week and has continued to lose ground since,
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