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(Ryan Remiorz/Ryan Remiorz/The Canadian Press)
(Ryan Remiorz/Ryan Remiorz/The Canadian Press)

Loonie gains despite commodity weakness Add to ...

The Canadian dollar shook off early losses to close slightly higher against the U.S. currency Thursday despite a drop in both oil and gold prices.

Both commodities fell amid reports that Libyan leader Moammar Gadhafi was considering proposals from Venezuelan President Hugo Chavez for a peace plan to resolve the political crisis that has split the African country in two.

The loonie closed up 0.02 of a cent at $1.0286 (U.S.).

The American currency weakened after the president of the European Central Bank, Jean-Claude Trichet, warned that the bank is ready to act soon to make sure high inflation does not become entrenched in the 17-country euro zone.

The markets took Mr. Trichet's comments as a clear hint that interest rate increases would be considered and the euro spiked to almost $1.40 (U.S.).

The April crude contract on the New York Mercantile Exchange lost 32 cents to $101.91 a barrel after closing Wednesday at its highest level since September, 2008.

But prices are still up about 13 per cent from Feb. 18 as traders worry that anti-government unrest will spread to other oil-producing countries in the Mideast.

Reports of mediation proposals also pushed bullion lower as the April gold contract on the Nymex fell $21.30 from Wednesday's record close to $1,416.40 an ounce.

Copper prices lost early gains and the May contract in New York dipped one cent to $4.49 a pound.

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