Canadian dollar falls as commodities take hit from economic concerns

TORONTO – The Canadian dollar moved lower Monday as commodity prices weakened and expectations for economic data due later this week remained soft.

The loonie dropped 0.18 of a cent to 97.65 cents US.

Data on wholesale and retail sales are due out Tuesday and Thursday, respectively, and economists expect both to show that growth is slowing.

Ongoing concern about the direction of the European economy weighed on commodities.

The July crude contract on the New York Mercantile Exchange was down 76 cents at US$83.27 a barrel.

Gold bullion dropped $1.10 to US$1,627 an ounce while July copper edged up one cent to US$3.39 a pound.

Anxiety eased somewhat after a party headed by conservative leader Antonis Samaras got the most votes in Greek elections on the weekend, reducing the odds that the country will exit the 17-country European Union financial block.

Concern over a Greek exit had been so pronounced that many expected a run on banks Monday if political parties opposing a fiscal bailout had won the election.

But the broader scope of the financial burden facing the continent soon overshadowed whatever breathing room the election in Greece had offered.

On Monday, the cost at which Spain can borrow money reached levels seen only in Greece, Portugal and Ireland —three countries that required massive bailouts.

The interest rate on Spain’s 10-year bonds, an indicator of confidence in a country’s ability to pay off loans, hit 7.08 per cent, a new high since Madrid joined the euro.