TORONTO - The loonie added a quarter of a cent against the U.S. dollar on Wednesday as commodities moved higher ahead of Canadian inflation data and an economic update later this week.
The Canadian dollar rose 0.25 of a cent to 102.07 cents US.
Oil prices were up 93 cents to $87.58 a barrel on the New York Mercantile Exchange after a report on U.S. crude inventories gave ambiguous signs about the strength of consumer demand.
The price of gold gained $8.80 to $1,793.80 per ounce, and copper rose four cents to $4.03.
"It appears that the impact of all the attention over the U.S.’s debt and budget problems and the S&P downgrade has finally started to catch up to (the U.S. dollar)," said Colin Cieszynski, an analyst at CMC Markets Canada.
"Last week in all of the market turmoil a lot of capital ended up going into (U.S. dollars) that couldn’t find anywhere else to go. With stock and commodity markets stabilizing this week, capital has been leaving USD for greener pastures elsewhere."
However, worries over economic growth in the U.S. and eurozone linger over investor sentiment.
Reports Wednesday said President Barack Obama will unveil new ideas to create jobs and help the struggling poor and middle class in a major speech after Labour Day. Obama's plan is likely to contain a mix of tax cuts, jobs-boosting construction projects and steps to help the long-term unemployed, a senior administration official told The Associated Press.
If Obama's plan passes, the loonie could get a boost from the improved economic outlook in the U.S.
A report showed July producer prices rose more than expected, to 0.2 per cent. Excluding food and energy prices, that figure rose to 0.4 per cent.
The data comes ahead of the July consumer price index data that will be released Thursday from the U.S., where economists expect prices rose 0.2 per cent month-over-month, or 3.3 per cent from a year ago.
Canada's CPI data will be released on Friday. Economists expect prices rose 0.2 per cent in July from the month before and 2.9 per cent on an annual basis.