CAD Drops as Greek Story Takes Troublesome Turn

The Canadian dollar dropped today against the greenback and the Japanese yen, but rose versus the euro, as Greece won’t receive rescue until nation’s leaders would accept deeper budget cuts demanded by other members of the European Union.

Just recently it looked like the current part of the Greek story is nearing to a positive end as the country was going to receive the next portion of bailout. But now events took a nasty turn as Greek politicians rejected budget cuts that other EU countries (Germany most notably) demand from Greece. Markets came crushing down as the bad news wiped out all signs of optimism.

Commodities were among losers and the loonie, being a commodity currency, suffered with them. The Thomson Reuters/Jefferies CRB Index of raw materials lost 0.9 percent. Even the fact that Canada’s trade balance registered surplus of C$2.7 billion in December, the largest since October 2008, didn’t managed to help the currency.

USD/CAD climbed from 0.9948 to 1.0010, while CAD/JPY slid from 78.03 to 77.46 as of 17:40 GMT today. At the same time, EUR/CAD went down from 1.3214 to 1.3201, following the advance to 1.3249.