Canada dollar sags to 1-week low on slow growth outlook

Mon Jul 9, 2012 4:31pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - The Canadian dollar touched a one-week low against the U.S. currency on Monday along with global stock prices on investor uncertainty about the global growth outlook and concern about Europe's debt crisis.

Stocks on major world markets fell for a fourth day on Monday as investors fretted about disappointing economic data in Asia and parts of Europe, while EU finance ministers met again to grapple with the euro zone's debt crisis. <MKTS/GLOB>

Diplomats said on Monday that Europe will grant Spain an extra year to reach its deficit targets after it outlines further budget savings to a finance ministers meeting in Brussels.

Eurogroup finance ministers were trying to flesh out an agreement by EU leaders at a summit last month on establishing a European banking supervisor and using the bloc's rescue funds to stabilize bond markets.

But with differences persisting between north European countries and southern states, EU officials said no breakthroughs were likely this week.

"It's a general risk aversion play," said John Curran, senior vice president at CanadianForex of the general market mood.

"The euro zone has quite a lot on their plate to discuss, and I think there's a tendency for market disappointment which could see the Canadian dollar weaken off."

The Canadian currency ended at C$1.0193 to the U.S. dollar, or 98.11 U.S. cents, after earlier touching a low of C$1.0222, its lowest since June 29. On Friday, the currency finished at C$1.0186 versus the U.S. dollar, or 98.17 U.S. cents.   Continued...

Images of the front and the back of the new Canadian 50 dollar bill, made of polymer, are seen on display before a news conference in Quebec City, March 26, 2012. REUTERS/Mathieu Belanger