USD 92.2628

-0.33

EUR 99.7057

-0.56

Brent 86.99

+0.1

Natural gas 1.752

-0

660

Weak Euro and new fall of oil prices

The euro fell to new four-year lows against the U.S. dollar Tuesday amid fears Europe's debt crisis will cut into economic growth and leave European banks vulnerable.

Weak Euro and new fall of oil prices

The euro fell to new four-year lows against the U.S. dollar Tuesday amid fears Europe's debt crisis will cut into economic growth and leave European banks vulnerable. The most the euro fell Tuesday was 1.9 per cent to $1.2162 US. It hasn't been that low since April 17, 2006. By late afternoon, it was back up to $1.2211. A drilling rig west of Calgary on Sunday. Oil prices slipped below $70 US Tuesday. And as the American dollar gained, the price of oil — which is priced in U.S. dollars — resumed its two-week slide. Crude for June delivery closed down 67 cents to $69.41 US a barrel on the New York Mercantile Exchange after climbing as high as $72.52 earlier in the session.

Markets were also surprised when Germany's financial regulator abruptly announced a ban on naked short selling. Short selling is a bet that the price of an asset will fall. It involves borrowing an asset and selling it now with the expectation that the investor can repay the loan by buying the asset back later when it's cheaper, profiting by the difference in price. Naked short selling means selling without first borrowing the asset or ensuring it is available to be borrowed. Germany's sudden move — announced after markets closed in Europe — was aimed at curtailing trading bets against European government debt and 10 leading banks by currency speculators. Rampant speculation can drive currencies down and rapidly increase government borrowing costs.


That led to questions in the bond market about how bad things were that German regulators felt the urgency to act so quickly and without prior warning. The new trading bans go into effect at midnight. "They're changing the rules of the game," said Jason Rogan, director of U.S. Treasury trading at Guggenheim Capital Markets LLC in New York. "It's not something that was expected in the market at all. It may be a prudent measure, but to do it this late in the day with European markets closed, it's scaring people a little bit."

North American markets closed lower. In Toronto, the S&P/TSX composite index finished down 48.49 points to 11,764.51 and the Canadian dollar fell .31 cents to 96.43 US. In New York, the Dow Jones industrial average ended down 114.88 points at 10,510.95, and the Nasdaq composite index fell 36.97 points to 2,317.26 Gold lost $13.40 to close at $1,214.30 US an ounce.


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