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On Tuesday Canada’s dollar depreciated against its U.S. counterpart as concern European leaders may be unable to resolve the region’s debt crisis diminished demand for commodities and higher-yielding assets.
The Canada’s currency fell as global stocks dropped and raw materials including crude oil and copper fell. Crude oil for August delivery decreased 1.1% to $96.15 a barrel in New York. Oil is Canada’s biggest export. Copper futures fell 0.2%.
Foreign investors bought C$15.4 billion ($16 billion) of Canadian stocks, bonds and money market securities in May, their biggest net purchase in a year, led by federal government bonds, Statistics Canada said.
“The driver continues to be Europe, we’re seeing equities are down, oil is down and the loonie is correlated to those things quite heavily,” said Rahim Madhavji, president of Knightsbridge Foreign Exchange.
Euro-area government leaders will hold a special summit on July 21, stepping up efforts to stem the contagion from Greece. Leaders are at odds with one another and with the European Central Bank over demands by Germany and Finland that private investors bear some of the burden for a second Greek bailout.
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