Loonie moves lower as initial reaction from last week’s US Fed move settles

TORONTO – The Canadian dollar was lower in early trading on Monday as enthusiasm faded over the unveiling of a third round of economic stimulus by the U.S. Federal Reserve last week.

The loonie was off 0.12 of a cent to 102.85 cents US in the morning.

Meanwhile, a meeting of the 17 eurozone finance ministers over the weekend showed it will take months of negotiations and preparation to set up a new European banking union.

Eurozone countries are, among other things, divided over how many banks should be supervised by a new authority with the ability to bail out the lenders directly.

Creating a European banking union is important to ease concerns that bank failures might bring down the government finances of financially weak states such as Spain or Italy.

In commodities, the October crude contract on the New York Mercantile Exchange fell 28 cents to US$98.72.

Copper prices for December were down three cents to US$3.81 a pound. Copper, viewed as an economic barometer because it is used in so many industries, surged 19 cents last week.

Bullion was unchanged at US$1,772.70 an ounce.