The loonie rose 0.43 of a cent at 97.4 cents US.
"Commodity currencies are generally outperforming, as they’ve been hit hard over the past two months and look a little more attractive around these levels," said senior economist Benjamin Reitzes of BMO Capital Markets.
"Of course, that all depends on what happens in Europe. This weekend’s bailout for Spain’s banks has done little to calm market fears."
Ratings agency Fitch said it was downgrading 18 Spanish banks as a result of a previous downgrade of Madrid's sovereign debt on June 7. Fitch says it had conducted stress tests, both on the Spanish banking sector as a whole and on individual banks, updating results from tests done in 2011.
Eurozone finance ministers said Saturday they would make €100 billion available to Spain to revive banks crushed by bad real estate loans. But early relief about the deal turned to doubt as traders worry the money will just add to the Spanish government’s already considerable debts and perhaps force it to seek its own sovereign bailout.
That investor wariness was evident on bond markets where the yield on Spain's 10-year benchmark bond shot up 0.28 of a point to 6.81 per cent, a record high and dangerously close to the seven per cent yield that has forced other countries to seek rescue loans. The bond rate fell back to 6.67 per cent in late trading.
Italy’s yields rose to just over six per cent amid market frustration that European authorities seem unable to get ahead of the debt crisis.
There is also nervousness ahead of Sunday’s election in Greece. The worry is that a left-wing party that advocates tearing up the country’s bailout agreement will be the big winner. If that happens, Greece could end up leaving the eurozone with unpredictable consequences for other debt-laden eurozone countries such as Italy.
Oil prices were up after three losing sessions as traders also closely watched a quarterly meeting of the Organization of Petroleum Exporting Countries on Thursday.
Some members of the cartel have suggested recently that OPEC is producing too much crude and the group could decide to cut supplies to help boost prices. The July crude contract on the New York Mercantile Exchange climbed 62 cents to US$83.32 a barrel.
July copper dipped a cent at US$3.34 a pound while August gold gained $17 to US$1,613.80 an ounce.