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The Canadian dollar touched a fresh 12-year low and stocks were headed for a bear market plunge as China’s financial turmoil stretched into a fourth day, raising bets the Bank of Canada may cut interest rates as soon as this month to stimulate the economy.

The currency fell against most of its major peers as the price for crude oil, Canada’s biggest export until last year, continued falling. Crude touched it’s own 12-year low of $32.10 per barrel as China devalued its currency for an eighth straight day and then shut its stock market early to stem the market’s sell off.

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The odds the Bank of Canada will cut its benchmark interest rate back to match a record low 0.25 per cent at its Jan. 20 meeting now stand at almost 20 per cent, according to Bloomberg calculations based on trading in overnight index swaps. The odds of a rate cut were as low as 3 per cent a month ago.

“We’ve not yet gone over the threshold where they’ll cut again in the next meeting, but I think it’s becoming a very close call,” said Adam Cole, head of global foreign-exchange strategy at Royal Bank of Canada in London. “Weakening demand in China is a clear impact on oil prices; oil prices move globally and that has a direct impact on Canada’s exports and the capital spending plans of the companies doing the exporting.”