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Loonie regains some ground on improving trade data

Canadian dollars.

Jonathan Hayward/The Canadian Press

The Canadian dollar finished higher Wednesday on encouraging domestic trade data.The loonie rose 0.35 of a cent to 95.15 cents (U.S.), coming off the lowest closing level since October, 2011, reached Tuesday.

The improvement came as Statistics Canada reported that the country's merchandise deficit declined sharply to $303-million (Canadian) in May from $951-million in April as imports fell much more quickly than exports.

Still, the shortfall added to what is the longest run of merchandise trade deficits in 25 years as imports were down 3.2 per cent to $39.6-billion after four consecutive monthly increases. Exports contracted 1.6 per cent to $39.3-billion

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Meanwhile, political turmoil in Egypt and the re-emergence of sovereign debt worries in Portugal sent commodity prices higher.

Egypt's unfolding political crisis has now seen the country's military oust embattled President Mohammed Morsi, suspend the country's constitution and call early elections.

The strife has helped push the price of oil to its highest level in more than a year, rising above $100 (U.S.) a barrel for the first time since May, 2012. The August contract on the New York Mercantile Exchange ended ahead $1.64 at $101.24 a barrel.

August bullion lifted $8.50 to $1,251.90 an ounce on the Nymex. Copper prices rose 3.2 cents to $3.174 a pound for the September contract.

Portugal's financial markets went into a nosedive Wednesday as the government teetered on the brink of collapse, alarming investors and reigniting concerns about the euro zone's strategy for dealing with its prolonged financial crisis.

Prime Minister Pedro Passos Coelho has so far defied calls to resign but was running out of options to keep his centre-right coalition government together following the resignations of two key ministers in a spat over austerity.

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