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Canadian dollar rises against greenback amid lower oil

Canadian dollar coins.

Larry MacDougal

The Canadian dollar closed higher against the greenback Tuesday while oil prices pulled back from a 29-month high and data showed a solid performance in the housing sector last month.

The loonie was ahead 0.15 cents (U.S.) at 102.94 cents even as the greenback gained against a variety of other currencies, including the euro, amid sovereign debt concerns.

The April crude contract on the New York Mercantile Exchange fell 42 cents to $105.02 a barrel.

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But prices were volatile, earlier hitting a low of $103.33 a barrel and a high of $105.79.

Crude prices are up sharply from just under $90 a barrel Feb. 18 as fighting between Libyan rebels and forces loyal to long-time leader Moammar Gadhafi has intensified.

The Wall Street Journal reported that rebel and tribal leaders had been invited for talks by Mr. Gadhafi's inner circle of advisers. Other reports also indicated Mr. Gadhafi was looking for a deal that would allow him to step down.

Meanwhile, the Financial Times reported that producers such as Kuwait and the United Arab Emirates would join Saudi Arabia in raising production to make up for a drop in output from Libya, which produces nearly 2 per cent of the world's oil.

And prices also eased Tuesday as the Obama administration evaluated whether to tap U.S. strategic oil reserves.

However, observers say prices are expected to remain elevated over worries that anti-government protests could spread to oil-rich countries in the Persian Gulf, particularly Saudi Arabia.

Gold prices dipped with the April contract in New York off $7.30 at $1,427.20.

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Copper prices were up 1 cent at $4.34 a pound after tumbling 16 cents Monday on concerns over the high cost of energy and whether it will slow down global growth.

On the economic front, the Canadian housing sector continued to show solid growth in February as housing starts moved up about 6.5 per cent from the previous month.

Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of starts came in at 181,900 units, up from 170,600 units in January, 2011. CMHC said the rise was primarily a result of increased activity in the multi-family starts in Ontario and the Prairies.

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