TORONTO - The Canadian dollar advanced Friday morning and commodity prices rose amid hopes that sub-par Chinese growth will convince Beijing to embark on further stimulus measures for the world's second-largest economy. The loonie was up 0.18 of a cent to 98.35 cents US. China’s economic growth fell to a three-year low of 7.6 per cent during the second quarter, which was in line with expectations. Some estimates had growth pegged as low as 7.3 per cent. "Markets are adding risk back into their portfolio on relief that China’s economic data releases were not as bad as the whisper but also on the hope that they were bad enough to increase both monetary and fiscal stimulus," said Scotia Capital chief currency strategist Camilla Sutton. Other data for June showed industrial production slowing to 9.5 per cent year over year while retail sales eased a bit but beat expectations, rising 13.7 per cent year over year. In recent weeks, the Chinese authorities have cut interest rates, lowered banks’ reserve requirements to encourage lending and increased spending on infrastructure projects. The August crude contract on the New York Mercantile Exchange gained 67 cents to US$86.75 a barrel. Metal prices also ran ahead with copper ahead six cents to US$3.48 a pound. China is the world's biggest consumer of the metal, which is viewed as an economic proxy as it is used in so many industries. Bullion ticked $18.10 higher to US$1,583.40 an ounce. The Chinese economy has been a major prop for a global economy still recovering from the 2008 financial collapse and subsequent recession. A smooth bond auction from the eurozone’s third-largest economy helped to cement the positive tone in the markets. Italy sold €3.5 billion of three-year bonds at an average yield of 4.65 per cent. That was sharply lower than the 5.3 per cent it had to pay at a similar auction in mid-June when investors were acutely concerned about Greece’s general election and the scale of the problems in Spain’s banks.

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