Main Markets are Trembling



By: ORIT ALON  
Published: May 20th 2010
in Economics » Local

The Loonie
Pic: wikimedia commons

The Canadian dollar has now fallen nearly four cents in the last week and seven cents since late April, when it was equal to the American dollar. The main effect came from the fallout from the Greek debt crisis and concerns that the European Union's efforts to help Greece and other member countries will stall the global economic recovery. The US dollar which is seen as a safe haven, is rising while other currencies like the Canadian dollar are hurting. Tonight, the dollar was worth about 93.96 cents US, down 1.81 cents from the close on Wednesday.

 

Greece has announced €4.8-billion in wage cuts, a pension freeze and tax hikes to tackle its huge fiscal deficit and £300-billion debt pile. A general strike was called by unions representing 2.5 million workers, half the Greek work force, who want the government to withdraw austerity measures agreed with the EU and IMF in return for a €110-billion ($137-billion US) emergency aid package.

 

In Germany, Chancellor Angela Merkel called for a global levy on banks, a new European rating agency and a coordinated exit from stimulus measures as Germany stepped up efforts to drive financial regulatory reform. With markets still digesting the unilateral ban on some forms of speculative trading that Berlin introduced on Tuesday, Merkel said international efforts to get the financial system back on track should be stepped up. She announced at a financial conference that she is quite concerned about this issue.

 

The Canadian TSX and the main three trade markets are reacting in fear and from the beginning of the week have fallen sharply by 5 per cent as of now.




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