Loonie slips past 7 week low

Canada\'s dollar on Friday sank to its weakest against the US dollar in more than seven weeks on growing anxiety that the euro debt crisis could lead to a break-up of the currency bloc. Investors were rattled by word that Italy paid a record 6.5 per cent to borrow money over six months and that its longer-term funding costs soared. Standard and Poor\'s downgrade of Belgium\'s credit rating to AA from AA-plus added to a growing list of danger signals. The news pushed Can-adian stocks lower for a third straight session on Friday, while global equity markets retreated on fear that policymakers have no clear path of resolving Europe\'s debt crisis. Article continues below \"The Belgium downgrade was the key headline that drew market attention,\" said Greg Moore, foreign exchange strategist at TD Securities. Latest symptom \"It added to the overall sovereign credit and bank funding stresses that have been building over the past week. That\'s just the latest symptom of the overall issues.\" The Canadian dollar, referred to as the loonine due to the picture of the bird on its back, ended at C$1.0494 to the US dollar, or 95.29 US cents, after earlier hitting a low of C$1.0524 to the US dollar, or 95.02 US cents, its weakest level since October 5. On Thursday, the currency ended at C$1.0469 to the greenback, or 95.52 US cents. David Watt, senior currency strategist at RBC Capital Markets, said trading was thin for the second day on \"Black Friday\", the traditional beginning to the US holiday shopping season, following a US market holiday on Thursday for Thanksgiving. \"What we\'ve been watching is a near unrelenting stream of increasingly negative news,\" said Watt. \"Whether it\'s been on the global economy, the global outlook, what\'s going on in the Eurozone. That is basically getting markets very nervous — increasingly nervous.\" After breaking through C$1.0500, the next significant support level for the Canadian dollar is seen at the year-low of C$1.0658 against the greenback, notched in October. On the flip side, the Canadian currency could strengthen to C$1.0361 against its US counterpart, Watt said. ‘Risk tone\' Canadian government bond prices eased across the curve, following the trend in the US that saw Treasuries slip on profit-taking after recent gains. \"While FX markets had a clear risk tone, we\'re not really seeing that passed through to other markets,\" said Watt. \"Given where yields have been we\'re getting a little bit of a relief in that regard.\" Canada\'s two-year bond eased 8 Canadian cents to yield 0.950 per cent, while the ten-year bond was down 53 Canadian cents to yield 2.109 per cent.