The Canadian dollar fell today against the US dollar and the Japanese yen, but advanced versus the euro, as the European debt crisis continues to eat away confidence of Forex market participants and makes them to seek refuge.
Concerns that the crisis will hurt the eurozone economy intensified after the European Central Bank said that the lending to European banks surged to the record. Lending to eurozone banks increased â¬214 billion to â¬879 billion in the week ended December 23. The ECB balance sheet rose â¬239 billion to â¬2.73 trillion.
The loonie rose against the greenback earlier on the positive outcome of the Italian debt auction. Borrowing costs of European nations continue to decline, but that’s not enough to ease concerns in the long term.
USD/CAD rose from 1.0184 to 1.0230 as of 17:22 GMT today, following the earlier drop to 1.0124. CAD/JPY went down from 76.40 to 76.18, while EUR/CAD slid from 1.3310 to 1.3230, the lowest level since January.
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