Political uncertainty and upheaval in the euro zone pulled down the value of the Canadian dollar against the world's reserve currency on Tuesday as investors gravitated toward assets considered less risky, according to published reports.
The aftermath of elections in the euro zone saw Greece attempting to form a new government and a looming confrontation between the President-elect of France and the chancellor of Germany due to opposing views held by the two top economies of the region, according to Reuters.
Francois Hollande, a socialist who unseated Nicolas Sarkozy in France – the euro zone's second largest economy – is projected to hold differing views on how to handle the sovereign debt crisis than chancellor Angela Merkel of Germany, the region's top economy.
The U.S. dollar and the Japanese yen, considered safe-haven currencies, benefited from preferences away from assets considered more risky, like the Canadian dollar, according to Dow Jones Newswires.
Deputy Governor John Murray with the Bank of Canada suggested Monday that interest rate hikes are unlikely to occur soon, which also pulled down the value of the loonie on Tuesday, according to Dow Jones Newswires.
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