11/11/2011 08:43 EST | Updated 01/11/2012 05:12 EST

Canadian dollar down slightly amid rising prices for crude oil, metals

TORONTO - The Canadian dollar was up sharply Friday amid rising commodity prices and an easing of tensions over Europe's debt crisis.

The loonie gained 0.43 of a cent to 98.69 cents US on foreign markets.

Canadian banks and the domestic bond market were closed for the Remembrance Day holiday while the U.S. bond market was shuttered for Veterans Day.

Prices for oil and metals advanced as more political stability in Italy and Greece calmed investors.

The December crude contract on the New York Mercantile Exchange gained $1.22 to US$99 a barrel after going as high as US$98.78, its highest level since July 27.

Metal prices also advanced as December copper on the Nymex edged up seven cents to US$3.44 a pound.

Bullion rose while the December contract gained $16.50 to US$1,776.10 an ounce.

Markets were reassured as Italy took concrete steps to deal with reining in its huge debt.

Italy’s Senate approved an economic reform bill, opening the way for Premier Silvio Berlusconi to step down. He has been seen as an obstacle to meaningful economic reforms.

And in Greece, a former central banker was sworn in as interim prime minister. Lucas Papademos took over a coalition government after a two-week political crisis that jeopardized the country’s ability to continue receiving emergency loans.

The currency also moved higher amid good economic news from Canada's biggest trading partner.

The University of Michigan’s consumer sentiment index for this month rose to a higher than expected reading of 64.2, compared 60.9 for October.

"The move is pretty impressive, considering that it has been a very tumultuous month, particularly overseas," observed BMO Capital Markets senior economist Jennifer Lee.

"But who knows what lies ahead over the next two weeks?"