The Canadian dollar fell against the Japanese yen today after Moody’s Investor Service cut credit ratings of several Canadian banks. Later, the loonie erased losses. The currency gained versus the US dollar and the euro.
Moody’s downgraded long-term rates of six Canadian banks by one notch yesterday. David Beattie, Moody’s Vice President, said:
Today’s downgrade of the Canadian banks reflects our ongoing concerns that Canadian banks’ exposure to the increasingly indebted Canadian consumer and elevated housing prices leaves them more vulnerable to unpredictable downside risks facing the Canadian economy than in the past. Following today’s actions, the Canadian banks still rank amongst the highest rated banks in our global rating universe.
The loonie was supported by rising prices for raw materials. The Standard & Poor’s GSCI Index of 24 commodities advanced 0.4 percent. Crude oil went up 0.7 percent to $96.54 per barrel in New York.
CAD/JPY was near its opening level of 90.23 as of 2:40 GMT today after falling to 89.42. USD/CAD fell from 1.0060 to 1.0051 and EUR/CAD ticked down from 1.3536 to 1.3518.
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