The Canadian dollar closed higher against the greenback Thursday amid a slight dip in oil prices while the appetite for risk improved despite another wave of concern about the European debt crisis.
The loonie lifted 0.47 of a cent to $1.0244 (U.S.).
Traders also looked to Friday, when a Liberal non-confidence motion will be presented, setting the stage for a vote in early May.
"Nominally, the vote is tied to the parliamentary committee's findings that the Conservatives were in contempt of Parliament for insufficient data on spending plans," observed a commentary from RBC Dominion Securities Inc.
"But the Liberals are quick to point out that they are unhappy with the budget and most other things Conservative as well."
Elsewhere, Portugal's financial collapse appeared inevitable on Thursday, as markets took the government's resignation as proof the debt-heavy country will lose its year-long battle to avoid a bailout.
Investors pushed the interest rate on Portugal's 10-year bonds to a euro-era record of 7.71 per cent - an unsustainable financial burden that could soon force the country to ask for a rescue like Greece and Ireland did last year. Analysts estimate a bailout would amount to €80-billion ($113.02-billion U.S.).
Portugal's prime minister quit on Wednesday after opposition parties overwhelmingly rejected his last-ditch round of austerity measures aimed at preventing the euro zone's weakest economy from plunging into chaos.
Traders also took in news that Moody's Investor Services has downgraded the senior debt rating on 30 Spanish banks.
Meanwhile, a European summit begins Thursday "and all indications are that agreements will be formalized that will solve the region's sovereign debt issues," said CanadianForex vice-president John Curran.
"The market is accepting this for the time being and a return to risk has emerged once again with [the Australian, New Zealand and Canadian currencies]benefiting."
Oil prices were lower following three days of gains as fighting in Libya - and worries that it could spread to countries in the oil-rich Persian Gulf, particularly Saudi Arabia - drove the so-called risk premium on crude higher. The May oil contract on the New York Mercantile Exchange slipped 15 cents to $105.60 a barrel.
Gold prices backed away from Wednesday's latest record close as the April bullion contract in New York rose moved $3.10 lower to $1,434.90.
Copper prices were off two cents at $4.41 after shooting up 12 cents Wednesday, partly because investors reckon that massive rebuilding in Japan from the huge earthquake and tsunami will spur demand for the metal used extensively in construction.