C$ drops as Europe, U.S. overshadow domestic data

Fri Jun 4, 2010 4:36pm EDT
 
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By Ka Yan Ng

TORONTO (Reuters) - Canada's dollar hit its lowest point in more than a week against the U.S. currency on Friday as intensifying concerns about the outlook for European and global growth outweighed firm domestic jobs data.

North American equity markets also slumped, contributing to sinking sentiment for riskier assets, following softer than expected U.S. job numbers and news that Hungary's finances were in much worse shape than previously expected.

"These fears in Hungary of further defaults got the markets scared again," said Aaron Fennell, senior markets strategist at futures brokerage Lind-Waldock.

"It's basically been a mass exodus into the U.S. dollar from any asset that's perceived to be risky. That seems to include the Canadian dollar."

The currency finished at C$1.0607 to the U.S. dollar, or 94.28 U.S. cents, down sharply from C$1.0412 to the U.S. dollar, or 96.04 U.S. cents, at Thursday's close. The currency was down 0.8 percent on the week.

At one point, the currency tumbled to C$1.0626 to the U.S. dollar, or 94.11 U.S. cents, its weakest level since May 27.

The European worries roiled financial markets, and also triggered a drop in the euro to its lowest in more than four years, further exacerbating a flight from riskier assets.

Market players looked past May Canadian job figures, which were almost double the number expected, while other Canadian data, building permits for April and the Ivey Purchasing Managers' index for May, also reinforced momentum in Canada's economic recovery.   Continued...