Canadian Dollar Breezes Past Parity
Canadian dollar breezes past parity on back of EU plan
TORONTO— The Canadian Press Published Thursday, Oct. 27, 2011 5:38AM EDT
The Canadian dollar CAD/USD-I surged well over a full U.S. cent to close above parity with the greenback Thursday after European leaders came up with a formula for dealing with the region’s crippling debt crisis.
The currency jumped 1.36 cents (U.S.) to $1.0088, its first close above parity since Sept. 20, as investors bought up riskier assets following the agreement. It had moved as high as $1.0109 during the session.
Since late September, the loonie had been caught up in intense market volatility as traders fled to the safe-haven status of the greenback on worries about a Greek default and the effect such a move would have on the financial system. It had tumbled as low as just above 95 cents. But markets SPX-I were relieved after European leaders came up with a three point plan to deal with the debt crisis, which has threatened the region’s banks and a fragile global economic recovery. These included a significant reduction in Greece’s debts and private creditors like banks will be asked to accept 50 per cent losses on the bonds they hold. The continent’s banks will be strengthened, partially so they could sustain deeper losses on Greek bonds.