The Canadian dollar advanced today against all 16 most-traded currencies after eight banks in the European Union failed the stress tests, increasing concerns about the EU financial system.

The stress tests were performed for the first time this year after last year the European Banking Authority was criticized for their tests being too easy to pass. Eight banks failed the tests with a total capital deficit of €2.5 billion. All banks in Germany, France, Italy, the UK and Ireland passed the tests. The failed banks must provide a plant to raise the required capital.

With all the problems in Europe and the US the Canadian currency looks comparatively attractive as Canada’s economy remains relatively robust. But Forex traders should remember that Canada has its share of problems. Manufacturing sales declined 0.8 percent in May, following the 1.3 percent decline in April. The sales were almost flat since the beginning of this year.

USD/CAD closed today at 0.9533, falling from 0.9602. EUR/CAD dropped from 1.3582 to 1.3497. CAD/JPY advanced from 82.33 to 82.93.

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