TORONTO - The Canadian dollar declined Thursday but was well off the early lows of the session as the U.S. dollar lost some early strength and commodity prices turned positive.
The loonie moved down 0.13 of a cent to 103.92 cents US after early steep drops in oil pushed the currency as low as 103.15 cents US.
"There are mounting signs that global growth is slowing," said Scotia Capital chief currency strategist Camilla Sutton.
"Tighter monetary policy across much of the world, combined with early signs of softening in the strength of Chinese data has weighed heavily on markets. Markets are nervous."
The June crude contract on the New York Mercantile Exchange gained 76 cents to US$98.97 a barrel. Oil had plunged as low as US$95.25 following a warning from the International Energy Agency that higher crude prices are hurting demand in the United States.
Prices also fell in response to another move by China to have most of its banks increase the amount of money they hold in reserves to curb inflation after higher than expected price increases in April.
On Wednesday, crude fell over US$5 on news that U.S. gasoline demand dropped 2.4 per cent last week, the largest drop in seven consecutive weeks of declines, and that oil supplies grew by 3.8 million barrels, more than twice as much as analysts expected.
Copper prices also recovered from early losses sparked by concerns about repeated moves to slow the Chinese economy and the July contract on the Nymex was up six cents at US$3.97 a pound after tumbling 13 cents Wednesday. China is the world's biggest consumer of copper.
Bullion prices climbed $5.40 to US$1,506.80 an ounce.
