Canadian dollar fell for a second week against the dollar

Canadian dollar fell for a second week against the dollar as investors turned to the perceived safety of government debt in the U.S. Europe's concern for the sovereign debt crisis deepens.

The currency, dubbed the loonie for the bird's image in the C $ 1 coin, retired a month of high risk appetite of investors declined and stocks of crude and compare progress. The attractiveness of U.S. assets was also polished U.S. Treasury yields rose to their highest in seven months. Details next week may show gains slowed in the Canadian consumer price and retail sales.

"The heritage and the positive history of commodities was making earlier in the week, but in the second half of the problems in Europe and risk aversion overwhelmed," said George Davis, chief technical analyst of fixed income and of currency strategy at Royal Bank of Canada Dominion Securities RBC in Toronto. "Europe has created a tone of an offer to the U.S. dollar and Canadian dollar."

The Canadian currency weakened 0.5 percent to C $ 1.0140 per U.S. dollar yesterday in New York, from $ 1.0091 on 10 December. It touched C $ 1.0001 on 15 December, the strongest since the last time you traded in a one-on-one with the dollar on 11 November. One Canadian dollar buys 98.62 U.S. cents.

Canadian government bonds rose, pushing the benchmark 10 - year bond yield down 12 basis points to 3.19 percent from 3.30 percent on 10 December. A basis point is 0.01 percentage point. The yield touched 3.37 percent on Dec. 14, the highest since June 21. The price of the 3.5 percent security due June 2020 gained 95 cents to C $ 102.55.

Two weeks off

The Canadian dollar depreciated to a two-week low yesterday, C $ 1.0147, as an agreement by EU leaders at a two-day summit in Brussels did not allay the concern of the debt crisis will extend from Greece and Spain to other nations in the region.

Moody's Investors Service downgraded the credit rating to Baa1 Ireland Aa2 yesterday after the government was forced to seek outside help last month, staggered by losses in the country's banking system. The new rating, three levels above non-investment grade, is the same that led countries including Russia and Lithuania.

The EU leaders agreed to amend the treaties of the block to create a permanent mechanism for crisis management in 2013. Divisions erupted on measures to prevent debt crises from involving Portugal and Spain.

"It's good to have a mechanism, but instead is in 2013 so there is much to be discounted in the market," said CJ Gavsie, director general for foreign exchange trading in Toronto at BMO Bank of Montreal, Capital Markets.

For now, Germany ruled the filling of the present 750 billion euros ($ 1 billion) of emergency funds or aid by land to Portugal or Spain, which reinforces the skepticism in the markets.

U.S. Yields Surge

The dollar rose against most major counterparts this week as benchmark Treasury yields rose to 10 years, touching 3.56 percent on 16 December, the highest since May 13. The stock prices of U.S. government decreased as the Federal Reserve said on December 14 the U.S. economic recovery is permanent, and Congress passed an 858 billion U.S. dollars to extend the Bush tax cuts-was for two years. Barack Obama President signed the bill into law yesterday.

Crude oil, the main export product of Canada, cut a breakthrough. January futures fell as low as $ 87.01 a barrel yesterday in New York after rising to $ 90.76 a barrel on 7 December, the highest since October 2008. The Standard & Poor's / Toronto Stock Exchange Composite Index fell 0.3 percent during the past five days, the first loss in three weeks.

Profit for the year

The Canadian dollar gained 4.4 percent last year to an extent of 10 currencies of developed countries "The U.S. dollar fell 1.8 percent."

Bank of Canada Governor Mark Carney may want to consider selling Canadian dollars as an option for moderate gains in the currency driven by purchases of other central banks, Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, wrote in a report yesterday.

The strength of the Canadian dollar undermines the ability of Carney to raise interest rates to curb rising levels of household debt, Shenfeld said in the report. Further gains in the currency may slow growth, he said.

"It is a weapon has not yet been touched: fighting fire with fire," wrote Shenfeld. "Canada could coincide with the central bank's foreign intervention in favor of our intervention currency compensation, the sale of an equivalent volume of crazy."

Consumer prices rose last month at an annual rate of 2.2 percent compared with a rate of 2.4 percent in October.

Retail sales rose 0.5 percent in October after increasing 0.6 percent the previous month. Sales have declined since May. The national statistics agency data are presented on 21 December.