Canadian dollar dives on debt concerns
The following is excerpted from the 5 May 2010 edition of "globeandmail.com".
The Canadian dollar swooned to a two-month low Wednesday as continued worries about European sovereign debt drove investors into the perceived safety of the U.S. currency.
The loonie... dipped as low as 96.58 cents (U.S.), down almost a cent from Tuesday’s close of 97.56 cents. It recently inched back to 97.23 cents.
The euro, meantime, hit a 14-month low against the U.S. dollar on worries Greece’s fiscal woes will spread to other indebted nations....
The currency hit parity last month and has gained 14 per cent against its U.S. counterpart over the past year. It has weakened in recent weeks though, as debt worries have sparked a flight into what’s seen as the world’s safest currency: the greenback....
The U.S dollar, as a result, is benefiting from the risk-aversion trade, said John Curran, senior vice-president at Canadian Forex.
The currency’s volatility is causing extra headaches for Canadian exporters. An HSBC poll released Wednesday showed foreign-exchange fluctuations are the top concern over the next six months because it makes business planning more difficult....