European Crisis Continues to Hammer Down Canadian Dollar

The Canadian dollar continued to fall as the concerns for Europe continued to intensify. The indecisiveness of the European governments makes investors ask whether the politicians have ability and willingness to address the region’s issues or they would allow the European Union to fall apart.
Two major negative events occurred in Europe. First, the yield on the Italian and Spanish bonds jumped. Second, Germany refused to boost the European bailout fund. As a result, the futures on crude oil, the key Canadian export, slumped as much as 5.3 percent to $94.87 per barrel in New York.
Markets look at what Europe is doing and are very disappointed. The Standard & Poor’s 500 Index slid 1.1 percent, while the MSCI World Index dropped 1.8 percent. Canada’s key Standard & Poor’s/TSX Composite Index lost 1.8 percent.
USD/CAD traded near 1.0384 today as of 3:10 GMT after rising from 1.0338 to 1.0393 yesterday. EUR/CAD traded at 1.3488, following the advance from 1.3472 to 1.3489 at yesterday’s trading. CAD/JPY was at about 75.13 today, while it slipped from 75.39 to 75.06 yesterday.

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