3 Min Read
* Low of C$1.0285 to the US$, or 97.23 U.S. cents,
* Oil price drops below $82 a barrel
* Bonds flat to higher, eye U.S. Treasuries
TORONTO, May 5 (Reuters) - Canada's dollar dropped against the U.S. currency on Tuesday to touch its lowest level in nearly six weeks as investors worried that Greece's debt crisis would spread to other euro zone countries.
The Canadian currency sank to a low of C$1.0285 to the U.S. dollar, or 97.23 U.S. cents, its weakest level since March 26, as world stocks fell to eight-week lows and the euro dropped to its weakest level in a year as investors remained worried about the effectiveness of Greece's aid package. [MKTS/GLOB] [.N]
German Chancellor Angela Merkel and the head of the IMF warned of financial contagion on Wednesday unless a euro zone debt crisis is stopped in Greece. [ID:nSGE644093]
"It's really not a made-in-Canada driver," Jack Spitz, managing director of foreign exchange at National Bank Financial, said of the currency's weakness.
"The Canadian dollar is taking its cue from the broader risk appetite, whether it's on or off. For the last number of days it's been off due to events that are emanating out of Europe."
At 7:45 a.m. (1145 GMT), the Canadian dollar CAD=D4 was at C$1.0281 to the U.S. dollar, or 97.27 U.S. cents, down from Tuesday's finish at C$1.0250 to the U.S. dollar, or 97.56 U.S. cents.
Concern about the fiscal health of euro zone countries drove investors to the safety of the greenback, putting downward pressure on oil and metals prices. [O/R] [GOL/]
Oil prices dropped below $82 a barrel, while base metals were also weaker.
"With the euro lower and the risk currencies lower as well, the Canadian dollar is trending toward the 90-day moving average at C$1.0314," said Spitz, noting the next key technical levels he's watching for are between C$1.0304 and C$1.0324.
Canadian bond prices were flat to higher across the curve, following U.S. Treasuries where yields touched their lowest in almost three months on Wednesday on Greek debt concerns. [US/]
The two-year Canadian government bond CA2YT=RR rose 2 Canadian cents to C$99.57 to yield 1.740 percent, while the 10-year bond CA10YT=RR gained 7 Canadian cents to C$99.60 to yield 3.548 percent. (Reporting by Jennifer Kwan; Editing by Theodore d'Afflisio)