Canada’s main stock exchange was trading slightly higher Monday morning (July 13) as investors awoke to find Greece had hammered out a bailout deal with its creditors, keeping the economically fragile nation in the Eurozone.
The Toronto Stock Exchange’s S&P/TSX Composite Index opened at 14,487.07, up 0.53%, at the start of the day.
The Canadian dollar, however, opened at US$78.59, down from its Friday close of US$78.87. By mid-morning Monday, the loonie had fallen to a low of US$78.22.
“The deal is positive for market sentiment, but several hurdles yet remain,” TD economist Andrew Labelle wrote in a note to investors.
He said the deal removes some global investment risks and “paves the way” for the U.S. Federal Reserve to increase its overnight target rate.
Economists speculate the Bank of Canada will cut its target rate on Wednesday (July 15) in a bid to lower the value of the loonie and spark exports.
Meanwhile, the majority of Canadians don’t believe their own personal finances will be impacted by Greece’s economic troubles, according to an Angus Reid Institute poll released Monday.
In a poll of 2,000 North American respondents, 54% of Canadians did not anticipate being worse off as a result of the Greek economic crisis compared with 39% of Americans.
When asked who was to blame for the crisis, Canadians generally either blamed Greece (45%) or blamed a combination of Greece and its creditors (36%) for how the crisis unfolded. Just 5% of Canadians blamed the IMF, European Union and European Central Bank.
