Dollar hits one-month low on European debt fears

Thu Nov 17, 2011 4:58pm EST
 
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By Jennifer Kwan

TORONTO (Reuters) - The Canadian dollar sank against the U.S. currency for a fourth straight session on Thursday, following a sell-off in global equity and commodity prices on mounting concerns Europe's debt crisis will spread.

The safe-haven greenback rose and commodity currencies such as the Australian, Canadian, and New Zealand dollars notched losses as investors grew frustrated the two-year old debt crisis is far from being resolved. <FRX/>

"Risk is really not trading particularly well today," said Darcy Browne, managing director, fixed income and currencies with CIBC Capital Markets Trading.

The Canadian dollar hit a low of C$1.0296 against the U.S. dollar, or 97.13 U.S. cents, its weakest level since October 12.

The currency ended at C$1.0283 versus the greenback, or 97.25 U.S. cents, down from Wednesday's North American session close at C$1.0229 against the U.S. dollar, or 97.76 U.S. cents. The currency has fallen more than 1.6 percent so far this week.

World stocks and oil prices fell on Thursday as a rise in Spain's borrowing costs to almost 7 percent at an auction fed fears that the euro zone debt crisis could spread further.

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In the absence of any real resolution in Europe it's unlikely risk-sensitive currencies or commodities will have any meaningful gains in the short term, said Browne.   Continued...