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The Globe and Mail

Cyprus troubles, lacklustre economic data weigh on Canadian dollar

Canadian dollars, or loonies, sit on its American counterpart on Thursday Sept. 20, 2007 in Montreal.

Paul Chiasson/The Canadian Press

The Canadian dollar moved lower Tuesday, weighed down by the debt troubles in Cyprus and underwhelming Canadian economic data.

The loonie was down 0.45 of a cent to end the day at 97.37 cents (U.S.).

Lawmakers on the Mediterranean island rejected a draft bill that would have seized part of residents' bank deposits in order for the country to qualify for an international bailout.

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European officials have said that without a bailout, the country's main banks will collapse and the country could end up having to leave Europe's joint currency. Banks in Cyprus will stay shut until Thursday to prevent a bank run before parliament has backed the plan to seize a percentage of bank deposits.

The uncertainty impacted confidence for euro zone oil demand, and the April crude contract on the New York Mercantile Exchange slipped $1.58 to settle at $92.16 a barrel.

Gold stocks were ahead with April bullion moving up $6.70 to $1,611.30 an ounce, while May copper fell 2.3 cents to $3.406 a pound.

Meanwhile, Statistics Canada said manufacturing sales edged down 0.2 per cent in January to $48-billion (Canadian) — the fourth decline in five months — affected by weakness in automotive as well as the petroleum and coal product industry.

Wholesale sales rose by 0.3 per cent in January to $49-billion, mainly due to higher sales in computer and communications equipment and supplies.

In volume terms, wholesale sales were up 0.5 per cent for the month.

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