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Italian debt clips loonie's wings

Published by Steve Coleman on November 25, 2011

Italy's burgeoning debt problems dragged down the Canadian dollar Friday morning.

With Italy having to raise bond prices to an average yield of 7.814 per cent to borrow the €2 billion it needed in two-year bonds, investors were sinking their cash into the United States. The decision drove the loonie down 0.4 of a cent to 95.12 cents US.

The last time Italy put out two-year bills to tender in October, the European government paid 4.628 per cent.

Short-term credit for the country rose to 6.504 per cent. Last month's auction sold €8 billion Euros on a six-month term at 4.628 per cent.

Italy's current €1.9 trillion in debts is equal to roughly 120 per cent of its current economic output.

For a more detailed look, see the following Winnipeg Free Press story.

 

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