European Woes Weaken Loonie
The Canadian dollar weakened today against the U.S. dollar and the Japanese yen despite the good economic data as the worries about the debt problems in Europe overshadowed the favorable fundamentals.
The announcement of the government spokesman Peter Szijjarto fueled the concerns that the crisis is spreading to Eastern Europe. Szijjarto stated:
It’s clear that the economy is in a very grave situation. I don’t think it’s an exaggeration at all to talk about a default.
This statement had huge impact on the volatility of the global markets, overshadowing the report that the Canadian employers added about 25,000 jobs in May.
The analysts say that the fundamentals should be supporting the Canadian currency. It’s just the words of politicians, spreading fears among the traders, that prevent the loonie from appreciation.
USD/CAD trade near 1.0522 as of 17:03 GMT today after opening at 1.0400. CAD/JPY plunged to 87.16 from the opening price of 89.10.
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Earlier News About the Canadian Dollar:
- Loonie Boosted by Employment Outlook, Oil & Stocks Prices (2010-06-02)
- Canadian Dollar Drops After Central Bank's Announcement (2010-06-01)
- Canada's Economy Bolsters Canadian Currency (2010-05-31)
- Canadian dollar Goes Up on Improving Risk Sentiment (2010-05-27)
- European Woes Lead to Loonie's Weakness (2010-05-25)