Canada's currency crisis deepened yesterday as its dollar plunged to a record low of 69.13 U.S. cents while the Toronto Stock Exchange suffered its worst day in more than four years.
Analysts said the currency's value threatened tourist travel to the United States, where a Canadian dollar wouldn't buy a cup of coffee in some hotels.
The battered currency reached its new low in late afternoon before regaining only slightly to close in Toronto at 69.20 cents.
Meanwhile, the U.S. dollar rebounded yesterday when the Bank of Japan signaled that the yen's rise was going too far and when the British pound came under renewed attack from a continuing fall in oil prices. Gold dropped sharply.
Markets were edgy over reports that President Reagan, in his state of the union speech last night, would direct the Treasury Department to recommend steps that might bring stability to currency markets.
Analysts said the Canadian currency was driven down by speculators in Europe and on the International Money Market in Chicago. Coupled with that was the belief world oil prices would continue falling and that Canada's 1985 deficit of $35 billion -- $24 billion U.S. -- was too large.
Canadian Finance Minister Michael Wilson, under attack from opposition parties in parliament, said the deficit problem was like a "100-car freight train . . . slow to stop it and turn it around."
He said his Conservative government could not fix exchange or interest rates.
As currency woes continued, the Toronto Stock Exchange's composite index of 300 stocks fell 60.75 points to 2,782.15, marking the sharpest drop since Sept. 25, 1981.