Loonie drives higher against the euro

Posted On: February 04, 2013

The monetary unit of Canada achieved its top gain of three weeks against the shared currency of the European Union as two of the 17-nation bloc's top currencies slipped into political messes, according to Bloomberg.

A news report about Spanish Prime Minister Mariano Rajoy accepting bribes prompted calls for him to resign. A survey indicated former premier Silvio Berlusconi of  Italy is closing in on the front-runner while Berlusconi appeals a tax fraud conviction that holds a four-year prison sentence.

"Euro is off the highs which is contributing to some selling of euro/U.S., euro/Sterling as well as euro/Canada," managing director of foreign-exchange Jack Spitz with National Bank of Canada in Toronto told Bloomberg on Monday. "The market by and large is somewhat more neutral on the Canadian dollar now, rather than being overly bullish or bearish."

Italy and Spain host the region's third- and fourth-largest economies, respectively, thus political happenings impact the foreign exchange markets.

The Canadian Press reports a chief currency strategist said the corruption charges against the Spanish leader and members of his party have the potential to continue pushing up yields on Spanish bonds.

Category: Industry News

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