Canadian Dollar Falls as Fundamentals Favor Safe Currencies

The Canadian dollar slumped today against its US counterpart as the tension between North and South Korea is becoming more heated and the European debt crisis threatens to spread across the Eurozone, causing the investors shun the growth-related currencies in favor of the safer ones.

The conflict between North and South Korea is closing to the brink of war and was further worsened with the involvement of the United States. The policy makers of the Eurozone are attempting to convince Portugal to accept the aid from the European Union’s bailout fund. The European leaders hope with such move to prevent the sovereign-debt troubles to contaminate Spain.

The Standard & Poor’s 500 Index fell 0.6 percent and the MSCI World Index slid as much as 1 percent. The futures on crude oil, the key export of Canada, slipped 1.3 percent to $82.78 per barrel.

USD/CAD climbed from 1.0095 to 1.0202 as of 18:36 GMT today after rising to the intraday high of 1.0246. EUR/CAD rose slightly from its opening level of 1.3489 to 1.3498.

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