Loonie down amid declining metal prices
The Canadian dollar was slightly lower Friday morning with early gains disappearing as copper and gold prices declined.
The currency declined 0.16 of a cent to 100.19 cents US as traders also took in inflation numbers that came in slightly above expectations.
Statistics Canada reported that higher gasoline prices led to Canada's annual inflation rate rising two notches to 2.5 per cent in January.
As well, underlying core inflation -- which excludes volatile items such as some fresh food and gas -- rose to 2.1 per cent, one tenth of a percentage point higher than the Bank of Canada's target.
Metal prices deteriorated with the March copper contract in New York down two cents to US$3.77 a pound.
And April gave back $6 to US$1,722.40 an ounce. Oil prices maintained early gains, running up 68 cents to US$102.99 a barrel.
Crude has jumped from US$96 earlier this month as a surge in stock markets suggests investor confidence in the U.S. economic outlook is improving.
At the same time, there was rising optimism that Greece will get a crucial bailout. A spokesman for German Chancellor Angela Merkel said she and the leaders of Italy and Greece are "optimistic" that a second massive bailout for Greece can be agreed next week. The 17 finance ministers of the countries that use the euro are meeting Monday to discuss the bailout.
The comment was the strongest indication yet that the meeting will bring some tangible decisions on the C130-billion rescue for Greece as well as a related C100-billion debt relief from private investors.
Also, Germany appeared to abandon its effort to delay the release of the bulk of the bailout money until after Greek elections expected to take place in April.
And on Friday, France's Finance Minister Francois Fillon told RTL radio that the Europeans must honour their commitments, now that the Greek Parliament and party leaders have met key conditions.
Earlier this week, markets had become vexed by worries that Greece could be forced into a disorderly default on a vital C14.5-billion bond repayment due next month. A deterioration in relations between Greece and its partners in the eurozone, particularly with Germany, had prompted speculation that a default may be brewing.
Rising fears that a military conflict will erupt over Iran's nuclear program and block oil supplies from reaching markets has also helped push crude prices higher.
However, some analysts are starting to worry that rising fuel costs will undermine consumer spending and stymie economic growth.