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Loonie Drops on EU Summit Speculations
Submitted by Tradervox 2 on Tue, 26/06/2012 - 15:27
Tradervox (Dublin) - After speculations emerged that the European Union Economic meeting might not bring a solution to the existing debt crisis in the region, the Canadian dollar registered a drop against the US dollar as commodities dropped in the global market. The loonie has continued with it decline from last week where it dropped 0.3 percent against the dollar, touching the weakest level in almost two weeks as commodities such as crude oil and stocks declined globally. The yen has been among the top performers but the US dollar has continued with its advance against major peers in the market.
According to Shaun Osborne, of Toronto-Dominion Bank, the current rise of the dollar marks the start of a momentum that might continue for some time since the commodity prices remain soft. He also predicted that the Canadian dollar may weaken beyond C$1.0450. Some surveys have shown that loonie has depreciated 0.7 percent in last month the same as US dollar while the euro weakened by 0.9 percent in the same period. Last month the pound dropped the most, slipping 1.4 percent while the New Zealand currency was the biggest gainer moving up by 4.1 percent last month.
Derek Halpenny a currency researcher at Bank of Tokyo-Mitsubishi UFJ Ltd, indicated that the Canadian dollar will be among the currencies that will lose this week as the market becomes disorderly through summer and winter. The EU Economic Summit is expected to disappoint in their resolve to deal with the crisis in euro zone. The Canadian dollar dropped by 0.5 percent against the dollar to trade at C$1.0292 per US dollar at the close of trading in Toronto yesterday after speculation of lack of decisive measure from the EU summit emerged. The currency had earlier dropped to C$1.0318 which is the weakest it has been since June 12.
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