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Canadian dollar loses ground against U.S. greenback on negative sentiment

Canadian dollars, or loonies, sit on American dollar bills on Sept. 20, 2007 in Montreal. THE CANADIAN PRESS/Paul Chiasson
September 26, 2012 - 8:42 AM

TORONTO - The Canadian dollar lost ground against the U.S. greenback Wednesday morning as commodity prices fell and investor sentiment turned negative.

The loonie fell 0.31 of a cent to 101.67 cents US as commodity prices failed to get a lasting boost from an improvement Tuesday in U.S. consumer confidence to its highest level since February.

In Canadian economic news, the Conference Board of Canada said consumer confidence showed improvement this month, following a weak showing in August. The Ottawa-based economic forecaster says its Index of Consumer Confidence increased 6.7 points to 82.2.

A report from Scotiabank currency analysts says with little domestic data available, the loonie will be trading on broader global economic themes.

It noted the loonie has lost two per cent since the day after the U.S. Fed announced further stimulus measures as European and Asian concerns come to the forefront.

Meanwhile, the benchmark New York oil contract was $1.19 lower at $90.18 a barrel, the December gold contract slipped $19.20 to 1,747.20 and the December copper contract fell five cents to $3.71.

The catalyst to the latest round of pessimism stems from comments Tuesday from Charles Plosser, president of the U.S. Federal Reserve's Philadelphia branch, indicating that the Fed's efforts to support the world's biggest economy would likely fall short of its goals.

The comments reinforced the current pessimism about growth prospects and dragged down stocks on Wall Street and then Asia. Disappointing news out Europe and Spain Wednesday also weighed on investors.

News from © The Canadian Press, 2012
The Canadian Press

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