Canadian Dollar Close to One-week Low

The Canadian dollar fell 0.5 percent as of 4:02 p.m. Toronto, against the U.S. dollar dropping from C$1.0325 yesterday to C$1.0375 today.

With the strong possibility of another global slowdown, one that really hasn't began to recover in any meaningful way, Matthew Strauss, senior currency strategist at Royal Bank of Canada, noted that Canada's reputation as strong producers of raw materials will help the currency and its bonds.

The European sovereign debt crisis is part of that concern, but even more so, and under-reported at this time, is the challenges facing China, who is battling the threat of inflation by increasing interest rates and regulating their property industry more.

But there's no doubt about the fact that China is the major consumer of base-metal commodities from Canada, and it's probably not a matter of whether or not demand will lower, but the degree to which it will.

That also has commodity countries like Brazil and Australia concerned as well, who have been counting on China to help their emerge out of the recession in a sustainable manner. That expectation is no longer a certainty for any country or company providing commodities to them.

It's unlikely the Canadian dollar will continue to fall, although if it happened for a short period of time, it would be advantageous to Canadian business, as the lucrative tourist season is coming, and Canadian exporters could compete better with a lower currency