Canadian Dollar Drops Most in a Week as Cyprus Levy Sours Risk

The Canadian dollar posted its biggest drop in more than a week against its U.S. peer as a proposed levy on deposits in Cyprus’s banks threatened to throw Europe back into crisis, souring risk appetite.

The currency pared losses after data showed foreign appetite for Canadian bonds rebounded in January, led by the largest monthly purchase of corporate debt in more than a decade. Cypriot lawmakers delayed voting on a 5.8 billion euro ($7.5 billion) levy demanded by fellow euro-zone countries to secure a bailout aimed at preventing financial collapse and a possible exit from the shared currency. The U.S. Federal Open Meeting Committee begins a two-day policy meeting tomorrow.