Aug 24, 2012 / 6:21 am
The Canadian dollar was slightly lower Friday amid doubts about central bank actions to help the U.S. economic recovery and to keep the euro monetary union intact.
Lower oil and metal prices also pushed the commodity-sensitive loonie down 0.01 of a cent to 100.63 cents US.
Markets have been supported this month after European Central Bank president Mario Draghi pledged to do whatever was necessary to protect the euro currently. Traders had hoped this would be backed up by definitive measures at the ECB's next interest rate meeting Sept. 6.
But bank officials say that Draghi may wait until Germany's Constitutional Court rules on the legality of Europe's permanent bailout fund before announcing any new measures to buy government bonds.
The court is set to rule on Sept. 12.
Mark Chandler, Head of Canadian FIC Strategy at RBC Dominion Securities, also noted that risk advanced after the German Finance Ministry confirmed for the first time that a scenario involving a Greek exit from the eurozone "and accompanying contagion firewalls are being examined."
Greek prime minister Antonis Samaras is in Berlin for talks with German Chancellor Angela Merkel.
Samaras has been arguing that Greece should have more time beyond the mid-2014 deadline to complete reforms that are a condition of it continuing to receive bailout loans. Without the help, Greece would be forced into a chaotic default on its debts and could be forced out of the eurozone.
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