TORONTO - The Canadian dollar closed lower Friday amid a new round of worries connected with the eurozone's debt crisis, while concerns about demand sent commodity prices tumbling.
The loonie was down 0.3 of a cent at 98.64 cents US as traders also looked ahead to next week's interest rate announcement from the Bank of Canada. Most analysts don't expect the central bank to hike rates until late next year at the earliest.
Losses on commodity markets picked up in the wake of weak economic news from the world's biggest economy.
U.S. retail sales for March were down 0.4 per cent. Economists had expected flat reading following a 1.1 per cent rise in February.
The poor showing indicated that higher taxes and weak hiring have made consumers more cautious about spending.
An increase in Social Security taxes, which kicked in on Jan. 1, has lowered take-home pay this year for nearly all workers.
May crude on the New York Mercantile Exchange dropped $2.22 to US$91.29 a barrel.
Oil continued to lose traction after the International Energy Agency lowered its forecast for global oil demand in 2013 by 45,000 barrels to 90.6 million barrels a day. Its predictions were similar to those made earlier this week by OPEC and the U.S. Energy Department.
May copper stepped back eight cents to US$3.35 a pound and June bullion fell $63.50 to US$1,501.40 an ounce.
Gold has fallen almost five per cent this week after Goldman Sachs dropped its forecast for 2013 to US$1,545 an ounce, down from a prior forecast of $1,610. Also, minutes of the latest Federal Reserve meeting showed members were at odds about when to stop quantitative easing.
The program, involving printing more money to buy bonds, has had a depressive effect on the U.S. dollar in the past and helped hike gold prices since bullion is seen as an inflation hedge.
Risk sentiment also took a hit and the U.S. currency strengthened after Cyprus’ president said Friday that he will ask the European Union to provide more help for the crisis-hit country, which has to pay for most of its expected €23-billion bailout.
Last month, Cyprus and its international creditors agreed on a €17- billion bailout package for the country so it could rescue its banking sector and prop up its economy. The euro countries and IMF would contribute 10 billion, with Cyprus making up the rest, mostly by overhauling its banks.
However, since then, the bailout package has increased to €23 billion, with Cyprus’s share swelling to €13 billion.