LOONIE GAINS ON COMMODITY PRICES

D O L L A R

The Canadian dollar strengthened versus the greenback yesterday, helped by a combination of strong commodity prices and the U. S. currency’s failure to build on its recent gains.

The currency finished at US85.45¢, up from US85.01¢ at Tuesday’s close.

“Gold and oil, I think both of them were just enough to push Canada into a positive mode this morning, and then obviously the big dollar weakened off a little bit today, so that helped out as well,” said Steven Butler, director of foreign exchange at Scotia Capital.

He said the greenback’s inability to drive past the $1.18 level during the previous session resulted in selling pressure on the U.S. currency.

While the U.S. dollar has risen versus most currencies due in part to forecasts of interest rate hikes, the loonie has stuck close, helped by expectations of Bank of Canada tightening and stronger commodity prices — particularly oil.