Loonie holds near 7-week lows as U.S. data drags

By Claire Sibonney

TORONTO (Reuters) - Canada's dollar held near seven-week lows against the greenback on Wednesday as weak U.S. economic data added to worries about the recovery, though a late rebound in commodity and equity markets cut most of the currency's early losses.

Morning figures showed new U.S. home sales slumped to their slowest pace on record in July and orders for costly durable goods were soft, heightening fears the economy was at risk of a new downturn.

The Canadian dollar crept as low as C$1.0669 to the U.S. dollar, or 93.73 U.S. cents, after the durable goods data, before building back up.

Later in day, bargain hunters in search of beaten-down assets boosted U.S. stocks to finish in positive territory, while oil settled higher above $72 a barrel, snapping five days of losses.

"Since weakening early this morning (the Canadian dollar) started to strengthen throughout the day at a slow pace," said Camilla Sutton, senior currency strategist at Scotia Capital.

"And it's been a similar story across asset classes, so we've seen oil move higher and equities make up for their losses early on." (more)