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Loonie ends higher on China, euro zone economic gains

Canadian dollars.

JONATHAN HAYWARD/THE CANADIAN PRESS

The Canadian dollar closed higher Tuesday as traders took in data suggesting that the euro zone and Chinese economies are improving.The currency gained 0.24 of a cent to 100.38 cents (U.S) after Markit, a financial information group, said its purchasing managers' index for the euro zone economy rose to a 10-month high of 48.6 in January from 47.2 in December.

Although the index remains below the 50.0 mark that would indicate expansion, the survey echoes other findings that the worst for the euro zone economy may be over.

And HSBC's Chinese purchasing managers index was firmly in expansion territory, coming in at 54 in January, up from 51.7 in December.

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"Still solid job gains plus higher business expectations bode well for further improvement of services sectors' growth," said HSBC chief China economist Hongbin Qu.

"Following the growth bottoming out in [the fourth quarter of] 2012, China's growth recovery is now on a firmer footing."

Commodity prices were mixed with the March crude contract on the New York Mercantile Exchange up 47 cents at $96.64 (U.S.) a barrel.

April gold bullion was $2.90 lower at $1,673.50 an ounce, while March copper was unchanged at $3.77 a pound.

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