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Loonie gains more than a cent
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CBC News-The Canadian dollar rose sharply Wednesday and North American markets headed higher, buoyed by speculation that new measures proposed to help deal with the eurozone's government debt crisis will succeed.
Investors were also in a buying mood as the outgoing Slovak government coalition and opposition reached agreement to ratify an enlarged eurozone financial bailout fund by Friday.
On Tuesday, the Slovak parliament had rejected a bill to endorse the plan. It was the last and only one of the 17 countries that use the euro to reject the plan. The measure requires unanimous support.
The loonie's official Bank of Canada close was 98.30 cents US, up 1.01 cents. The S&P/TSX composite index gained 154.41 points, or 1.3 per cent, to 12,029.96.
November crude on the New York Mercantile Exchange slipped 24 cents to $85.57 US a barrel. The widely traded December gold contract climbed $21.60 to $1,682.60 US an ounce.
U.S. markets were also higher with the Dow Jones industrial average ahead 102.55 points, or 0.90 per cent, to 11,518.85, the Nasdaq up 21.7 points, or 0.84 per cent, to 2,604.73 and the S&P 500 index higher by 11.71 points, or 0.98 per cent, to 1,207.25.
European banks told to raise capital
The president of the European Commission said Wednesday that banks should temporarily increase their capital buffers to better withstand the crisis.
Jose-Manuel Barroso said if banks can't raise the capital on the market, they should get help from governments, who in turn can ask for capital from the eurozone bailout fund.
Barroso also called for a permanent bailout fund, the European Stability Mechanism, to come into force already in mid-2012, one year ahead of schedule.
Investors ignored skepticism by some analysts about Barroso's comments.
"The Europeans continue to talk a good game but when it comes to actually doing something, they're always a day late and a euro short," said Gavin Graham, president of Graham Investment Strategy.
"We have had this script a half a dozen times before over the last couple of months, which is one of the reasons why we went into bear market territory and had the big falls in markets a week or so ago."
"[It was] not so much a map as a finger pointed in the general direction of where policy makers need to head," observed Stewart Hall, a currency strategist at RBC Capital Markets.
European markets advanced, with London's FTSE 100 index closing with a gain of 0.85 per cent, Frankfurt's DAX up 2.21 per cent and the Paris CAC 40 ahead 2.42 per cent.
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