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The  Canadian dollar is recording a new low against the US dollar: USD/CAD reaches 1.19.

The fingers are easily pointed to a fresh drop in the price of oil: WTI falls below $47 and Brent follows suit.

The lowest for WTI has been $46.95 and for Brent $48.36. Specifically for Canada, the expected veto by the White House on the Keystone XL pipeline also weighs on Canadian oil prices, as they are harder to export.

$50 was seen as the bottom for oil prices by some, while others looked at $40 –  around the immediate lows after the financial crisis as the lows.

These kind of low oil prices are bad for the Canadian oil industry but also for the American one. On the other hand,  citizens in both countries enjoy the lower  prices at the pump. The extra cash is expected to boost spending, especially in the US, and this could have a positive impact on Canada as well.

The big level looming above is 1.20. The story of the Canadian dollar is mostly the weakness of oil versus the general strength of the rest of the economy. However, the C$ was hit on Friday by a weak jobs report.

Here is how it looks on the chart:

Canadian dollar at new lows with prices of oil January 12 2015