The Canadian dollar declined today after the equities and the commodities, including crude oil, fell on the concerns for the European banking system, making the investors less willing to risk and weakening the currencies tied to growth.
The MSCI World Index of stocks fell 1.5 percent. Crude oil futures lost 3.1 percent to $68.06 per barrel on the New York Mercantile Exchange. Crude oil is the biggest export of Canada. The yield on the 10-year security dropped 8 basis points to 3.28 percent, almost the lowest level since December.
The analysts say that the banking troubles in the Europe showed that the severity of hardships encountered by the EU economy was underestimated. These revelations spread the pessimism across the markets, portending tough times for the riskier currencies.
USD/CAD traded near 1.0762 as of 16:14 GMT today up from the opening price of 1.0625. EUR/CAD traded at 1.3219, rising from its opening level of 1.3142.
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