Corporate foreign exchange news

The Canadian dollar moved lower against its US counterpart in trading yesterday (August 26th), driven down by a drop in commodities prices.As the world's second largest holder of proven oil reserves after Saudi Arabia, Canada is often reliant on strong crude prices to maintain economic performance.Canadian oil sands projects have been particularly hard hit during the economic crisis, as the high costs of extracting and refining the crude made the operations unprofitable at a time when oil was trading at a low of $34 a barrel.And as oil dropped lower yesterday, Forex traders moved away from the loonie and into safer currencies such as the dollar, concerned that there was a further downside risk to the Canadian economy."The correction itself is not a surprise, the magnitude is a bit of a surprise. And the fact that we underperformed other commodity peers ... also highlights increased volatility in the Canadian dollar," said Matthew Strauss, senior currency strategist RBC Capital Markets, speaking to Reuters.