Canadian dollar dives on debt concerns

The Canadian dollar swooned to a two-month low Wednesday as continued worries about European sovereign debt drove investors into the perceived safety of the U.S. currency.
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Loonie hits two-month low as concerns about European debt send investors into the U.S. currency


The loonie (CAD/USD-I0.95-0.02-2.44%) dipped as low as 96.58 cents (U.S.), down almost a cent from Tuesday’s close of 97.56 cents. It recently inched back to 97.23 cents.

The euro, meantime, hit a 14-month low against the U.S. dollar on worries Greece’s fiscal woes will spread to other indebted nations.

“Contagion fears are driving this market,” said Rahim Madhavji, president of Knightsbridge Foreign Exchange.

“Markets have yet to stabilize with European issues continuing to remain top of mind. Will the issue stop at Greece? Who is next? Rumours about Portugal's debt rating being downgraded. All this uncertainty is impacting equity and commodity markets and currency markets.”