TORONTO - The Canadian dollar was little changed Wednesday following a string of strong gains based on hopes of central bank action to boost economic growth and some relief following the conclusion of last week's European Union summit.

The commodity-sensitive currency was down 0.07 of a cent to 98.7 cents US with markets generally as U.S. markets were closed for the Independence Day holiday.

The loonie had risen more than 1.5 cents US since last Thursday alongside a sharp advance in prices for oil and metals.

The currency's rise to a seven week high came amid growing expectations that policymakers will use fiscal and monetary stimulus to bolster flagging growth. The European Central Bank and the Bank of England are scheduled to meet Thursday. Analysts are expecting the ECB to cut its key rate by up to half a percentage point and the U.K. central bank to boost the amount of money in circulation.

Also, Europe’s leaders appeared at the end of last week to have finally come up with plans that show they are serious about restoring confidence in the eurozone. Among other things, the plan allows European bailout funds to pump money directly into troubled European banks, rather than make loans to governments to bail out the banks. The move rescues the banks without putting strapped countries deeper in debt.

There was also relief over a stronger than expected official purchasing managers index from China, "which is encouraging for those who expect a soft landing (for the economy) and commodity prices," said Scotia Capital chief currency strategist Camilla Sutton.

Prices for oil and metals were lower in electronic trading on the New York Mercantile Exchange following significant increases over the last three sessions.

The August crude contract backed off 62 cents to US$87.04 a barrel after growing tensions with Iran helped push crude up almost US$4 on Tuesday. That still leaves crude up about $10 from last Thursday.

The September copper contract dipped three cents to US$3.51 — still up over five per cent since last Thursday — while August bullion stepped back $4.80 to US$1,617 an ounce.

The loonie has been losing momentum for several weeks, flirting with the 96-cent US level at one point as commodity prices sank under the weight of worry about the economic recovery and a worsening eurozone debt crisis.

Sutton added in a commentary that the loonie appears poised to move back towards parity with the greenback. But she also observed the currency could come under pressure at the end of the week when June employment data for Canada and the U.S. is released.

News from © The Canadian Press, 2012