The Greek Parliament, in AthensYIORGOS KARAHALIS
The Canadian dollar closed higher Tuesday as the U.S. currency weakened ahead of a crucial vote of confidence for the Greek government.
The loonie rose 0.82 of a cent to $1.02.84 (U.S.).
Failure on the part of Greek Prime Minister George Papandreou's new government to win the confidence vote would throw into question whether it can pass a critical new austerity bill by the end of the month. Without parliamentary approval for the new measures, Greece will not get the next instalment of its bailout - funds the country needs to avoid default.
Global markets have been volatile in recent weeks on worries that Greece could default on its huge debts, which could drag down Greek and European banks as well as stoke renewed fears over the public finances of other euro countries, such as Portugal, Ireland and Spain.
"Optimism about a Greece Parliament confidence vote has boosted market sentiment," said Rahim Madhavji at Knightsbridge Foreign Exchange.
"Look for the loonie to continue to trade on Greece headlines and risk sentiment."
Traders also took in data showing that Canadian retail sales were up in April but not as much as economists had expected. Statistics Canada said sales increased 0.3 per cent to $37.4-billion, which was below the 0.5 per cent pace that was forecast.
The largest increase among the subsectors in April was registered at vehicle and parts dealers, which were up 1.7 per cent.
Excluding sales at motor vehicle and parts dealers, retail sales were flat.
Oil prices nudged higher as hopes for a resolution to the Greek crisis pushed the euro up and the U.S. dollar lower, helping push the July crude contract on the New York Mercantile Exchange - which expired Tuesday - up 14 cents to $93.91 a barrel. The August contract rose 54 cents to $94.17 a barrel.
Oil tends to rise when the greenback drops as a cheaper U.S. currency makes commodities such as crude cheaper for investors with other currencies. When the dollar gains, oil tends to fall.
Less than two weeks ago, the Nymex contract was trading above $100, but concerns about deteriorating global demand for crude have helped push prices lower.
Metal prices also advanced with the July copper contract on the Nymex up 2 cents to $4.09 a pound.
Bullion was up for a sixth day as the August contract in New York gained $4.40 to $1,546.40.