Canadian dollar falls as lower oil helps greenback

Thu Jul 17, 2008 4:32pm EDT
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* Canadian dollar sinks 0.5 percent as oil price drops

* BoC Monetary Policy Report Update sees inflation rising

* Bond prices track U.S. market lower

By John McCrank

TORONTO, July 17 (Reuters) - The Canadian dollar fell to its lowest close this week against the U.S. dollar on Thursday, as oil prices declined, giving a boost to the greenback.

Bond prices fell along with the larger U.S. market in response to some solid U.S. data and a rally in equities.

The Canadian dollar closed at C$1.0068 to the U.S. dollar, or 99.32 U.S. cents, down from C$1.0022 to the U.S. dollar, or 99.78 U.S. cents, at Wednesday's close.

The currency hung around parity with the greenback for much of the day, rising above the level several times, but then backed off after a sharp drop in oil prices.

The price of U.S. crude oil CLc1 fell $5.31, or 3.95 percent, to $129.29 a barrel on concerns over waning U.S. demand and easing geopolitical tensions between Iran and the West. See [ID:nSP236258]   Continued...