The Canadian dollar took another tumble on Thursday.
The loonie closed down 1.97 cents to 101.51 cents US. The drop followed a Statistics Canada report showing that manufacturing sales had declined by almost 1 per cent in September.
The Canadian dollar has lacked stability in recent days. The loonie reached a record high last week at just over 110 cents US, but has been on a steady decline since.
A drop in the dollar Wednesday came after Paul Jenkins, the bank's deputy governor, said that the falling U.S. dollar poses the risk of "disorderly adjustment to global imbalances."
The loonie has spiked in value relative to the U.S. dollar, which has left Canada "bearing a disproportionate share of the adjustment," according to Jenkins' speaking notes posted to the central bank's website.
Government officials say that the U.S. dollar has depreciated by about 20 per cent since 2002. Canada's dollar and Europe's euro have each taken up about one-third of the slack.
BNN's Michael Kane said positive economic outlooks for the U.S. have also caused the soaring loonie to depreciate this week.
"Some of the economic indicators we're getting from the United States are bullish for the U.S. dollar," Kane told Â鶹´«Ã½net on Thursday.
"Also we're hearing commentary from some of the U.S. investment houses that the Canadian dollar is too high and it's just not supported by the fundamentals."
Manufacturing sector continues decline
The soaring loonie has also spelled trouble for Canada's manufacturing sector according to a new report from Statistics Canada released Thursday.
The states manufacturing sales declined 0.9 per cent in September, continuing a six-month decline in the sector.
"Sales of manufactured goods decreased to $50.4 billion from the $50.8 billion reported in August, and reached the lowest level posted since October 2006," the report stated.
Third-quarter sales were 1.8 per cent lower than those in the second quarter of 2007.
On an industry-by-industry basis, 15 of 21 manufacturing industries decreased in September, representing about two-thirds of total sales.
Computer and electronics manufacturers led the decline as sales plunged 11.9 per cent -- a surprising fall considering the industry reported gains over the past three months.
Despite the grave report, Canada's economy remains hardy with unemployment rates at their lowest in more than 30 years.
According to the latest Labour Force survey, record numbers of Canadians are holding down jobs with October's employment rate reaching an all-time high of 63.7 per cent.
