Loonie Falls vs. Greenback, Gains vs. Euro

The Canadian dollar slipped against its US counterpart as the declining stocks and commodities caused the speculation that the global economic recovery is losing its momentum. The currency strengthened against the euro.

The Standard & Poor’s 500 Index and the MSCI World Index fell 0.3 percent each today. Futures for crude oil, the main Canada’s export, dropped 0.4 percent to $86.53 per barrel, following the 1 percent decline earlier.

The renewed concerns for the European economy allowed the loonie, as the Canadian currency is often nicknamed, to rise against the euro. In the same time, these concerns damped the demand for the riskier currencies, weakening the loonie versus the greenback. This correction may also be explained as the profit-taking by the traders after the Canadian currency reached parity with the US dollar.

USD/CAD went up from 1.0002 to 1.0024 as of 19:10 GMT today, following the jump to 1.0054. EUR/CAD dropped from 1.4058 to 1.3955.

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