An interest rate cut by the

Bank of Canada

had little effect on currency prices Tuesday, as the rites of summer continue to draw currency traders off their desks.

The U.S. dollar fell slightly against the Canadian currency in the wake of the rate cut, pricing recently for C$1.5365. The greenback closed Monday's session at C$1.5374. The Bank of Canada lowered its key overnight rate by a quarter point to 4.25% and lowered its bank rate to 4.5% in an bid to help boost the global economy out of its current rut. Rates in Canada are still higher than in the U.S., where six separate interest rate reductions have left the key rate at 3.75%.

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Earlier today, the dollar peaked at one-week highs against both the euro and the yen, after the Argentine government won opposition support for spending cuts, a move that lessens the risk it will default on massive amounts of foreign debt. The win was largely dollar supportive, as concerns that Argentina may default on $128 billion in debt has prompted investors to unwind emerging markets positions funded in euros and yen, in effect strengthening those currencies against the dollar.

The euro traded recently for $0.8513, down from yesterday's close of $0.8528.

Before profit-taking set in to send the greenback down to 125.14 yen per dollar, below yesterday's close of 125.51 yen, the U.S. currency had gained slightly against the yen. The dollar's initial rise came after Japanese Finance Minister Masajuro Shiokawa suggested publicly that the Japanese government could help its ailing economy by further easing monetary policy. The euro also slipped on profit-taking against the yen, recently falling to 106.54 yen per euro, from yesterday's close of 107.03 yen.

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