Debt worries pull down loonie against U.S. dollar

Preoccupations about the widening sovereign debt crisis pulled down the value of the Canadian dollar Monday against the U.S. dollar, which benefited as investors drove toward the world's reserve currency, Bloomberg reports.

As compared to the greenback, the loonie fell 0.5 percent in value. Significant yields on the bonds from Italy caused concerns about the deepening crisis with debt-hobbled banks and public finance systems, which has pushed the Canadian dollar to its top value against the euro since April 1.

"With Canada they're kind of brushing off this labor report in the U.S. whereas everywhere else seems to have reacted pretty negatively to it," Tom Levinson, foreign-exchange strategist with ING Bank NV in London, told Bloomberg. "We still take the view that U.S. data will steadily improve throughout the rest of this year and that will contribute to better prospects for Canada as well."

The Canadian dollar marked its strongest price against its rival to the south in three years on April 29. The loonie fell on July 8 upon news that the U.S. created less jobs in June thatn anticipated. About three-quarters of Canadian exports are shipped to the U.S.

The sovereign debt crisis might spread to Spain and Italy from Greece, Ireland and Portugal, the Canadian Press reports.