BUSINESS

Canadian dollar moves lower for eighth session, commodity prices advance

05/25/2012 08:45 EDT | Updated 07/25/2012 05:12 EDT
TORONTO - The Canadian dollar closed lower Friday amid higher commodity prices and a lack of market-moving news from the eurozone.

The loonie slipped 0.23 of a cent to 97.13 cents US after closing lower the previous seven sessions with traders exercising caution ahead of a long weekend in the United States, where markets will be closed Monday for Memorial Day.

Commodity prices were higher after demand worries and a higher U.S. dollar sent oil, copper and gold to multi-month lows earlier this week.

The July crude contract on the New York Mercantile Exchange shed early losses to gain 20 cents to US$90.86 a barrel following positive U.S. consumer data. The University of Michigan's widely-watched index came in at 79.3 for this month, up from 76.4 in April.

The July copper contract on the Nymex was up two cents at US$3.45 a pound while gold bullion gained $11.40 to US$1,565.90 an ounce.

The dollar has lost 4.13 cents so far this month. The growing possibility that Greece will leave the euro has seen traders avoid risk in the forms of equities, commodities and resource-based currencies such as the loonie.

"We are firm believers that the current downside pressure on the Canadian dollar will continue as long as risk aversion remains high," said Scotia Capital chief currency strategist Camilla Sutton.

Worries have been rising steadily since political parties opposed to the terms of Greece's financial rescue made huge gains in an otherwise inconclusive election.

A new ballot planned for next month could see the anti-bailout political parties gain power, which would raise the likelihood of Athens leaving the euro.

European leaders say they want Greece to stay in the euro, but have so far shown no willingness to compromise on its austerity terms. The uncertainty of a Greek exit from the euro will hang over European markets at least until the elections on June 17.