The Canadian dollar touched a one-week low against the US dollar on Monday, weakened by mixed commodity prices and uncertainty about Europe's handling of Greece's debt woes. Another factor weighing on the currency was the fact that many Canadian dollar bulls had already placed bets, resulting in little fresh buying, said Eric Lascelles, chief economics and rates strategist at TD Securities.
"We've seen what are called 'net spec long,' so speculators who have bought the Canadian dollar, that's up to the highest level that we've seen in a long while and has more than doubled in the last week," said Lascelles. "The perception is that everybody that's in, is probably in so there's not much room for further momentum. That technical consideration is something that is causing the Canadian dollar to halt its advance, for the time being anyhow."
The currency touched a low of C$1.0148 to the US dollar or 98.54 US cents, its weakest level in one week. It finished the session at C$1.0188 to the US dollar, or 98.15 US cents, down from Friday's close at C$1.0164 to the US dollar, or 98.39 US cents.
While the fundamental picture for the Canadian dollar remains positive, the currency has been rattled by worries of European sovereign debt levels, which have boosted the safe haven appeal of the US dollar and stalled the Canadian currency's rise toward parity with the greenback. Traders were jittery before the March 25-26 summit of European Union leaders, where a key focus is expected to be Greece's financial stability. European leaders gave out mixed signals at the weekend over aid to Greece.
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