A Canadian dollar or loonieJonathan Hayward/The Canadian Press
The Canadian dollar turned lower Monday as oil prices headed back down to near the level of $55 a barrel (U.S.).
The loonie closed off 0.22 of a cent at 85.93 cents despite assurances from Saudi Arabia that the depressed oil market will recover on an improving economy.
In a speech at an energy summit in Abu Dhabi, Saudi Petroleum Minister Ali al-Naimi also denied his government was trying to suppress oil prices but said his county is opposed to cutting production.
"The best thing for everybody is to let the most efficient produce," he said at the Arab Energy Conference, a gathering held every four years.
Oil hit a high of $107 a barrel in June, but has since plunged nearly 50 per cent due to low demand and a production glut. Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, has refused to make cutbacks to support prices. OPEC supplies about 40 per cent of the world market.
Crude prices appeared to stabilize above $55 a barrel last week, suggesting they had found a floor. But on Monday, the January contract in New York dipped $1.87 to $55.26 a barrel.
"[The Canadian dollar] is likely to trade with a high correlation to oil prices, as well as fall victim to any end of year positioning," Camilla Sutton, Bank of Nova Scotia chief foreign exchange strategist, said in a note.
Metals were also lower, as February gold dropped $16.20 to $1,179.80 an ounce and March copper dipped a penny at $2.88 a pound.
The major economic releases this week come Tuesday when both Canada and the United States issue reports on gross domestic product for October.
The Toronto market will be closed on Thursday and Friday for Christmas and Boxing Day. New York markets will reopen on Friday.