TORONTO - The Canadian dollar was up 1.67 cents at 99.80 cents US Wednesday morning as the American dollar's global weakness intensified.
The loonie's latest gain came after Canadian potash producers reaped a rich new contract with China and oil prices probed new highs.
The euro, meanwhile, hit another record against the greenback after the European Union reported inflation in the euro zone heated up to 3.6 per cent in March.
The 15-country currency traded at US$1.5968, topping the previous record of US$1.5912 set last Thursday.
The American dollar also weakened against the British pound, which climbed half a cent to US$1.9770, and the Japanese yen, which rose to 102.04 to the dollar from 101.16.
Sentiment toward the Canadian dollar was bolstered as crude oil topped US$114 a barrel. The near-month contract on the New York Mercantile Exchange went as high as $114.68 and traded late in the morning at $114.01, up 22 cents after gaining $2.03 on Tuesday. Gold was up $16.70 to US$948.70 an ounce.
Also boosting the Canadian currency was word that Saskatchewan potash producers have won a US$400-a-tonne price increase from China's biggest fertilizer distributor, Sinofert Holdings.
Meanwhile, there was mixed news from the United States. Consumer prices increased 0.3 per cent last month, in line with expectations, but construction of new homes slumped 11.9 per cent to the slowest pace in 17 years.
The report on euro-zone inflation is likely to muffle calls for the European Central Bank to lower its policy interest rate from four per cent, because the bank's primary mission is to combat inflation. The ECB's disinclination to cut rates has contrasted with the easier-money approach of the U.S. Federal Reserve, the Bank of England and the Bank of Canada.
