TORONTO -- The Canadian dollar was lower Monday as commodities, particularly oil, pushed higher amid escalating violence in Iraq.
The loonie was down 0.08 of a cent to 92.03 cents US.
The conflict in Iraq worsened over the weekend as reports that the al-Qaida-inspired militants who captured two key Iraqi cities last week were involved in a massacre.
On Sunday, the militants posted graphic photos of truckloads of Iraqi soldiers that they apparently captured and killed and vowed to march on Baghdad.
The northern town of Tal Afar has become the latest to fall to the group, who have already captured a vast swath of territory including Iraq's second-largest city, Mosul.
Mosul lies in an area that is a major gateway for Iraqi oil. While the loss of the city has no immediate effect on oil exports, now at over three million barrels a day, it adds to concerns over security and the country's plans to expand oil production. The situation in the country's Sunni heartland, previously controlled by U.S. forces, has triggered fears that the world's oil supplies may be put at risk.
The July crude contract advanced 0.11 of a cent to US$107.02 a barrel.
In other commodities, August gold bullion added $6.50 to US$1,274.10 an ounce, while July copper rose two cents to US$3.05 a pound.
Meanwhile, the impact of the Iraq turmoil on the loonie is one factor, as markets look ahead to a interest rate meeting by the U.S. Federal Reserve on Wednesday, and the latest release of the consumer price index in Canada at the end of the week.
