TORONTO - The Canadian dollar closed lower Friday as the U.S. dollar strengthened amid fresh worries about the European debt crisis.
The loonie fell 0.68 of a cent to 103.24 cents US.
The American dollar gained ground after the European Union warned that the debt loads of Greece, Ireland and Portugal will be much bigger than previously forecast. The assessment added to fears that international bailouts are failing to solve the region's crisis.
The June crude contract on the New York Mercantile Exchange bounced between positive and negative ground before closing up 68 cents to US$99.65 a barrel with traders concerned about flooding in key oil refining areas in the U.S. Midwest.
But oil has been volatile this week after data Wednesday showed that U.S. gasoline demand dropped 2.4 per cent last week while oil supplies grew more than twice as much as analysts expected.
The volatility, in turn, has encouraged investors to turn to the relatively safe haven status of the American dollar.
This puts pressure on commodity prices since they are priced in U.S. dollars and become less attractive to buyers with foreign currencies.
Metal prices were mixed with the July copper contract up a cent at US$3.95 a pound while the June gold contract in New York dropped $13.20 to US$1,493.60 an ounce.
Sentiment had been positive earlier in the session following surprisingly positive economic data from Europe.
Eurostat, the EU's statistics office, said that the economy of the 17 countries that use the euro grew by a quarterly rate of 0.8 per cent in the first three months of the year.
That was more than double the 0.3 per cent growth posted in the previous three-month period and ahead of analysts' expectations for a 0.6 per cent increase.
Germany was the main driver of growth as its economy expanded by 1.5 per cent growth during the quarter.
The greenback also rose amid data showing that inflation in the U.S. rose by 0.4 per cent during April, which was slightly higher than expectations, as Americans paid more for food and gasoline. Excluding fuel and food, prices rose by 0.2 per cent.
