Traders Feel Doubts About EU Rescue Plans, CAD Suffers

The Canadian dollar weakened today after stocks declined as traders speculated that the European leaders would experience problems on their way to drag the European Union out of crisis.

The optimism about the European rescue plan was really short-lived and investors weren’t very impressed by the agreements achieved by the EU politicians. The situation in Europe still has heavy impact on the global economy and currently it’s unfriendly for most assets, save for “refuge” ones. The Standard & Poor’s 500 Index dropped as much as 2.5 percent and the S&P/TSX Composite Index declined 2.1 percent.

The Canadian currency (often nicknamed “the loonie”) followed other currencies in the rally against the yen after Japan’s intervention. Yet that same intervention boosted the US dollar, making the greenback to gain over the loonie. At the start of today’s trading generally CAD extended its yesterday’s trend against other currencies.

USD/CAD traded today near yesterday’ close of 0.9996 as of 00:54 GMT after on the previous trading session it jumped from 0.9920 to the daily maximum of 1.0026. EUR/CAD was down today from 1.3853 to 1.3832 after yesterday it fell from 1.4036 to the daily minimum of 1.3780 — the lowest level since September 22. CAD/JPY went today from 78.15 to 78.28, while earlier it reached 79.04.

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