Canada's Dollar Surges to Highest Level for Day in Year
Monday, May 10th, 2010
Just about a weak after losing the most value since January, the Canadian dollar surged again, moving up the most in over a year, as the European Union announced they were going to offer a loan package to struggling euro-zone countries worth almost $1 trillion.
Sacha Tihanyi, a currency strategist in Toronto at Bank of Nova Scotia, said this about the situation, “The events in the euro zone are providing the proper environment for a Canadian dollar rally. Crude is up very sharply, which is quite helpful as well.”
Other commodities rallied on the news too, with copper and crude oil rising, and numerous raw materials companies surging on the possibility of some stability coming to Europe.
Intraday, the Canadian dollar increased as high as 2.2 percent to C$1.0210 for each U.S. dollar.
The 10-year Canadian bond also rose as much as 15 basis point, to 3.65 percent, the most in a week. The bond, due to mature in June 2020, dropped 56 cent to C$99.49. They are 3.5 percent bonds at this time.
While commodity currencies in general responded strongly to the announcement Europe will attempt to slow down the sovereign debt crisis in the region, it should continue to be a somewhat chaotic and messy situation, as news of the depth of the crisis emerges, and whether or not it'll become a contagion outside of the euro-zone.
Article by Gary B
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
Tags: canadian dollar , commodities , commodity currencies , forex , sovereign debt crisis
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