Loonie Goes Down on Lower Oil Prices & German Bans

The Canadian dollar fell against its U.S. counterpart and the Japanese yen after Germany banned some kinds of the investments, causing the North American stocks to drop and oil prices to go down.

The ban will be applied to naked short selling and naked credit-default swaps of the Euro-zone government bonds at midnight and also to naked short selling in shares of 10 banks and insurers. The ban should last until March 31 of the next year. The reason for this ban is blames by the politicians, who think that such selling reinforced the debt crisis.

June for crude oil delivery fell 1 percent to $69.39 per barrel on the New York Mercantile Exchange. The analysts said that the price was too high considering supply. The China’s attempt to curb the growth of its economy also decreased demand for oil. Nevertheless, the global demand for crude oil, the main export of Canada, is considered high enough to support the Canadian currency.

USD/CAD closed at 1.0388 after it opened at 1.0324. CAD/JPY closed at 88.74 after opening at 89.65.

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