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Canadian dollar rises on higher oil prices, German growth

Canadian dollars.

JONATHAN HAYWARD/THE CANADIAN PRESS

The Canadian dollar closed higher Tuesday, supported by rising oil prices after Germany posted better-than-expected economic growth for the second quarter while U.S. retail sales data also beat forecasts.

The loonie was ahead 0.06 of a cent at $1.0082 (U.S.).

U.S. retail sales rose 0.8 per cent in July, the largest increase since February. Economists had expected a gain of 0.3 per cent.

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Overseas, Germany, which is Europe's biggest economy, posted 0.3 per cent growth in the second quarter, beating expectations of a 0.2 per cent increase, though slowing from the first quarter's 0.5 per cent growth.

At the same time, Eurostat, the European Union's statistics agency, said that the economies of both the eurozone and the wider 27-country E.U. shrank by a quarterly rate of 0.2 per cent in the second quarter of the year. In the first quarter, output for both regions was flat. A recession is officially defined as two straight quarters of falling output.

Spain, Portugal, Cyprus and Greece are already mired in recession.

The worsening debt crisis has dimmed the prospects for an economic recovery in the rest of the world.

However, the positive data Tuesday pushed the September crude contract on the New York Mercantile Exchange up $0.70 to $93.43 a barrel.

Copper prices stabilized after two days of declines in the wake of surprising drops in Chinese exports and Japanese economic growth. The September copper contract on the Nymex was up about half a cent at $3.36 a pound.

Gold prices lost early traction, declining $10.20 to $1,602.40 an ounce.

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