BUSINESS

Loonie down amid lower commodities, muted reaction to Fed stress test results

03/14/2012 08:46 EDT | Updated 05/14/2012 05:12 EDT
TORONTO - The Canadian dollar closed lower Wednesday amid sliding prices for oil and metals.

The commodity sensitive currency was down 0.39 of a cent to 100.7 cents US.

Crude prices fell even as data showed a smaller than expected increase in inventories last week. The U.S. Energy Information Administration said crude supplies rose 1.8 million barrels, far less than the 2.1 million increase that analysts expected. Oil was down $1.28 to US$105.43 a barrel.

Metal prices were lower with copper down five cents to US$3.85 a pound.

Improving sentiment about the U.S. economy punished gold prices as the April contract in New York tumbled $51.30 to US$1,642.90 an ounce.

There was little market reaction to news after the market close Tuesday that all but four of 19 major U.S. banks passed a Federal Reserve "stress test" exercise.

They also got the green light to boost dividends and take other steps that will make their stocks more attractive to investors.

One notable exception was Citigroup, the third-largest bank in the United States. It was among the companies the Fed said lacked enough capital to withstand another severe economic and financial crisis.