BLBG:Canada Dollar Fluctuates On Japan’s Downgrade, EU Summit
Canada’s dollar fluctuated against its U.S. counterpart amid reduced appetite for higher-yielding assets after Fitch Ratings downgraded Japan’s debt and ahead of a European Union summit tomorrow.
The loonie, as the currency is nicknamed, reached a four- month low yesterday against the U.S. dollar. Fitch lowered Japan’s sovereign-credit rating to A+, the fifth-highest ranking, from AA-, citing limited progress by the government in tackling the world’s biggest public debt burden. Canada holds a top AAA rating from all three major credit companies.
“Markets generally are slightly less risk-seeking today and that’s been a principal driver of the commodity currencies,” said Adam Cole, global head of foreign-exchange strategy at Royal Bank of Canada’s RBC Capital Markets unit in London. “It was not helped by the downgrade of Japan, which caused a spillover from dollar-yen strength to more general dollar strength.”
Canada’s dollar was little changed at C$1.0167 at 7:39 a.m. in Toronto. It reached C$1.0247 yesterday, the weakest level since Jan. 16. One Canadian dollar buys 98.36 U.S. cents.
German Chancellor Angela Merkel said yesterday she won’t shy away from disagreeing with French President Francois Hollande at the European Union summit beginning tomorrow in Brussels. Good cooperation “doesn’t exclude differing positions,” Merkel said in Chicago during a meeting of the North Atlantic Treaty Organization.
To contact the reporter on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
