Grave concerns about the potential depth of the sovereign debt scourge pulled down Canada's moneypiece on Wednesday, the third-straight day of losses against the world's reserve currency, according to published reports.
Reuters reports the loonie recovered from losses that brought it to its lowest price in at least four weeks early on Wednesday in response to the European Central Bank's acquisition of debt from Italy and Spain. The bond yields for both countries increased to levels of concern that prompted other euro zone nations to solicit bailouts.
"Everything is still trading off of the heels of what's playing out in Europe," currency trading managing director C.J. Gavsie with Bank of Montreal's office in Toronto told Bloomberg. Steadily climbing European bond yields are "still the talk of the marketplace. It's more market sentiment than technical drivers at this point."
Trailing only Germany and France in the euro zone, the economy of Italy might be too big to be rescued by a bailout, prompting large concern among investors.
Debt troubles plaguing the region are "truly systemic," said European Commission President Jose Barroso, according to Bloomberg. Higher-yielding assets likely will draw down as a result of the official's remark.
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