08/07/2013 09:36 EDT | Updated 10/07/2013 05:12 EDT

Canadian Dollar Down Half A Cent As Commodity Prices Weaken

TORONTO - The Canadian dollar fell nearly half a cent on Wednesday as commodities-influenced currencies moved lower.

The loonie dropped 0.44 of a cent to settle at 95.94 cents US.

The shift lower came as key commodities were mixed.

December bullion gained $2.80 to US$1,285.30 an ounce, ending six sessions of losses. September copper was unchanged at US$3.18.

The September crude contract on the New York Mercantile Exchange moved down 93 cents to US$104.37 a barrel, following the latest supplies report. The U.S. Energy Information Administration said crude supplies fell 1.3 million barrels for the week ended Aug. 2.

Questions have been percolating over the timing of the U.S. Federal Reserve's removal of monetary stimulus by tapering off its current bond-buying program, and recent comments from two regional Fed presidents that suggested the moves could happen in the near term.

"The Fed's attempts to cool market tensions related to tapering have reduced the allure of North American currencies over their European counterparts somewhat," said Stephen Gallo, European Head of FX Strategy at BMO Financial Group.

"Had the Fed not been so aggressive, we would have expected to see North American interest rate spreads over their European peers widen more in favour of the US dollar and the Canadian dollar."

Meanwhile, Statistics Canada says building permits dropped in June, making it the first decrease in six months.

Municipalities issued $6.6 billion worth of building permits in June, down 10.3 per cent from May, it reported.

The federal agency says the drop came mainly from the non-residential sector in Quebec and the residential sector in Ontario.

Nationally, residential sector permit values fell 12.9 per cent to $4 billion in June.

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