Canadian forex review: C$ drops with shocking Greek news

By Commodity News Service Canada

WINNIPEG, June 29 – The Canadian dollar was weaker against the US dollar on Monday, as the world was shocked to hear Greece’s prime minister decided to close banks in the country.

Banks will remain closed until July 6, to buy some time for Greek officials to decide whether or not they will accept the international aid offered to assist with their debt crisis, according to reports.

The Canadian dollar closed at US$0.8070 or US$1=C$1.2392 on Monday, which compares with Friday’s North American settlement of US$0.8120 or US$1=C$1.2315.

Further downward pressure came from weakness in crude oil values, according to analysts.

Though, positive Canadian economic data limited the downside. Statistics Canada said the Industrial Product Price Index (IPPI) increased 0.5 per cent in May. In April, the IPPI declined 0.9 per cent.

Canadian bonds closed sharply higher on Monday, as traders moved away from riskier assets and into safe-havens, such as government bonds, in light of the economic turmoil in Greece, brokers said.

The two-year bond yielded 0.563% Monday, from 0.635% Friday. The 10-year bond yield was at 1.739%, from 1.867%. Bond yields rise as their prices fall.