Canadian dollars.Ryan Remiorz/The Canadian Press
The Canadian dollar closed up sharply Tuesday, supported by surging prices for commodities, while traders moved into the currency on hopes of a resolution of debt problems in Europe.
The loonie jumped 0.75 of a cent to 98 cents (U.S.).
Reports said that European officials were working on a plan to recapitalize banks in the euro zone, using leverage to bolster the European Financial Stability Facility, the euro zone's bailout fund.
There was also relief after Greece's finance minister said Tuesday that the country will receive the next batch of bailout loans amounting to €8-billion ($10.9-billion) in time to avoid a potentially disastrous default.
Hopes that European officials can get a grip on the government debt crisis improved demand prospects and pushed commodity prices up sharply.
The November crude contract on the New York Mercantile Exchange advanced $4.21 to $84.45 while the December copper contract on the Nymex was up 16 cents to $3.44.
Bullion prices also recovered with the December contract ahead $57.70 to $1,652.50 an ounce.
Meanwhile, Slovenia's parliament on Tuesday voted in favour of boosting the powers of Europe's rescue fund.
The €440-billion fund is to buy government bonds of shaky euro zone countries like Greece or to lend money to governments before they get into a full-blown crisis. It has to be ratified by all 17 euro zone states to take force.
Finland votes on the measure Wednesday and Germany on Thursday.