May 13 (Bloomberg) -- Canada’s dollar fell to a six-week low after North American equities fell, reducing demand for higher-yielding assets.
The loonie dropped for second straight week for the first time since January as crude oil fluctuated today after sliding last week the most since December 2008. The Canadian dollar rose against the euro, erasing losses on speculation Greece will need to restructure its debt.
“The market seems to be going through this broader risk-off stage, and the Canadian dollar is a victim,” said Shane Enright, executive director at Canadian Imperial Bank of Commerce’s CIBC World Markets unit in Toronto. “There’s certainly the perception out there that commodities may have got ahead of themselves.”
The loonie, as Canada’s currency is also known, depreciated 0.6 percent to 96.86 cents versus the U.S. dollar at 5 p.m. in Toronto, the weakest on a closing basis since March 31, from 96.27 cents yesterday. One Canadian dollar buys $1.0324.
The Canadian dollar had a weekly drop of 0.2 percent after falling 2.2 percent last week, the most since July. It touched 94.46 cents on April 29, the strongest since November 2007.
Government bonds rose today, pushing 10-year yields down four basis points, or 0.04 percentage point, to 3.19 percent. The price of the 3.25 percent security maturing in June 2021 increased 32 cents to C$100.48.
Drop in Crude Oil
Crude oil for June delivery in New York rose 0.4 percent to $99.36 a barrel after earlier dropping as much as 1.9 percent. Futures gained 2.3 percent this week after tumbling 15 percent last week. Raw materials including crude account for about half of Canada’s export revenue.
The Standard & Poor’s 500 Index decreased 0.8 percent, erasing its weekly gain. The S&P/TSX Composite Index dropped 0.1 percent.
The Canadian currency appreciated 0.3 percent to C$1.3676 against the euro after touching C$1.3633 yesterday, the strongest level since April 1.
The German government supports an extension of maturities on Greek bonds because of the worsening deficit situation in Greece, Die Welt reported, without saying where it got the information.
Germany is waiting for the conclusions of a European and International Monetary Fund mission to Greece before making any decision on whether further steps may need to be taken to help the first victim of the debt crisis, a German government spokesman said.
“There’s been a great deal of rhetorical turmoil in the euro,” said Joseph Trevisani, chief market analyst at FX Solutions Inc. in Saddle River, New Jersey. “And it’s not just rhetorical, it’s real.”
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