The Canadian dollar traded at parity for much of Thursday, before giving back some of its gains to close at 99.83 US, up 0.18 of a cent from Wednesday's close.
The loonie and commodity prices advanced after the U.S. Federal Reserve's latest move to support the U.S. economy.
The S&P/TSX composite index opened higher but ended the session down 74.89 points at 12,464.32.
In New York, the Dow Jones industrial average appeared poised to make its highest close since the financial crisis, buoyed by solid news on factory orders and strong earnings reports from U.S. manufacturers, but also ended lower.
The U.S. government said early Thursday that orders for long-lasting manufactured goods rose for a second straight month in December. 3M stock was up 1.5 per cent and Caterpillar rose three per cent after each big manufacturer reported quarterly profits that exceeded analysts' expectations.
The Dow was down 22.33 points at 12,734.63. At its high of the day, it was up 85 points, about 30 points above its post-crisis closing high in April. The S&P 500 was down 7.62 points at 1,318.43 and the Nasdaq was down 13.03 at 2,805.28.
The Fed announced Wednesday that it would keep interest rates near zero until late 2014 in a sign that the economy needs considerable support for some time to come. But the move also reassured investors that the Fed is willing to undertake stimulus to encourage growth.
"Risk sentiment has been buoyed by the outcome of yesterday's FOMC meeting," said a commentary from Barclays Capital Research.
"Overall, the extent of this forward guidance was beyond what markets currently expected, so amounts to an easing of monetary policy."
The Canadian dollar hasn't closed above parity since the end of October.
The March crude contract on the New York Mercantile Exchange closed up 30 cents at $99.70 US a barrel.
The March copper contract in New York gained seven cents to $3.90 US a pound. Copper prices have surged more than 13 per cent during January amid signs of an improving economic conditions in the U.S. and China, which is the world's biggest consumer of copper. The metal has a reputation as an economic bellwether since it is used in so many businesses.
February bullion was up $26.60 at $1,726.70 US an ounce.
Italian yields fall
The loonie was also helped as traders appeared to be willing to take on more risk on growing optimism that Europe could eventually resolve its debt crisis.
Italy easily raised €5 billion from the markets Thursday in a pair of bond auctions that saw a sharp drop in borrowing rates. The sale showed healthy investor appetite in the first test of market sentiment since ratings agency Standard & Poor's on Jan. 13 dropped Italy's credit rating by two notches.
Italy has seen its borrowing costs ease in recent weeks, after yields on benchmark 10-year bonds pushed to the perilous seven-per cent level last year.
The 10-year bonds were trading at 6.04 per cent on the secondary market after Thursday's auction.
And Greece resumed talks with its private creditors in order to get a deal to avoid a potentially disastrous default.
The €100-billion private debt write down is a vital condition of a new bailout for Greece, which has been relying on international rescue loans since May 2010.
Under the deal, banks and other private sector investors would swap their Greek government bonds for new ones with half the face value, longer repayment deadlines and potentially lower interest rates.
If the write down fails, Greece will be unable to repay a €14.5-billion bond on March 20.
European markets closed higher with London's FTSE 100 index up 1.2 per cent, Frankfurt's DAX gaining 1.8 per cent and the Paris CAC 40 advancing 1.5 per cent.