Risk Averse Scenario Moves Loonie Charts

The Canadian dollar slid to the lowest level in two weeks versus its U.S. counterpart as pessimism regarding the global economy is affecting the outlook for currencies linked to growth, as its the case of the loonie, since Canada is one of the world’s leading suppliers of commodities.

This Thursday was once again marked by risk aversion as concerns regarding the European economic health are forcing traders to avoid riskier bets in foreign-exchange markets, on speculations that the Greek crisis will spread to other EU members and even to markets outside Europe, allowing the safety provided by assets in Japan to make the yen one of the top performers among the 16 main traded currencies. The decline for the loonie was only helped by statements in the U.S. suggesting that interest rates won’t be hiked by the Federal Reserve anytime soon, providing support for the loonie to pare some of its earlier losses versus its neighbor’s currency.

Greece is still making financial headlines with its budget crisis, this is fueling risk averse purchases among investors, according to analysts. The loonie may fall to lower levels on international events, since there are not many domestic speculations influencing Canada’s currency to move otherwise.

USD/CAD traded at 1.0598 as of 22:03 GMT from a previous intraday rate of 1.0511, the currency pair traded as high as 1.0675 today.

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