Europe Sends Markets in Turmoil, Hurting Canadian Dollar

The Canadian dollar sank today as the sovereign-debt crisis in the European Union and the increasing number of the jobless claims in the U.S. sent equities and commodity prices tumbling down.

Crude oil futures on dropped 2.8 percent to $67.91 per barrel on the New York Mercantile Exchange. Crude oil is the biggest export of Canada. The annual inflation increased from 1.4 percent in March to 1.7 percent in April. The unemployment unexpectedly increased in the U.S. despite the forecasts, which predicted less unemployed people.

The traders await the decision of the Bank of Canada at June 1st about whether to increase the interest rates, which will affect the Canadian currency. As this decision will likely be affected by the news from the Europe the analysts keep watchful eye on the development of the situation in the EU.

USD/CAD jumped to 1.0618 as of GMT 18:49 from its opening price of 1.0433. EUR/CAD rose to 1.3365 up from its opening level of 1.2952.

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