TORONTO - The Canadian dollar gained back some ground Thursday morning as commodity prices moved higher amid expectations of a move by China to stimulate its economy. The loonie gained 0.22 of a cent to 101.72 cents US. Meanwhile, the benchmark New York oil contract was $1.20 ahead at US$91.19 a barrel, the December gold contract added $10.10 to US$1,763.70 an ounce and the December copper contract rose three cents to US$3.74 a pound. Improved sentiment is being helped by expectations the People's Bank of China will soon take more steps to ease a slowdown in the world's No. 2 economy. In addition, the heads of the three parties in Greece's governing coalition have struck a basic deal on a new round of harsh austerity measures required for the country to continue getting vital rescue loans, officials said Thursday. Finance Minister Yiannis Stournaras said the long-delayed agreement placed him in a stronger negotiating position ahead of talks Monday with representatives of the country's bailout creditors, who will have the final word on the cutbacks. Greater focus will probably centre on Spain, where the government is due to unveil new austerity policies amid mounting concerns over the country's economic future. Spain's new austerity package, which is due to be unveiled toward the end of the European trading session, comes in the wake of a violent protest in Madrid and big falls in Spanish stocks. Traders also took in data showing the U.S. economy grew at a 1.3 per cent rate in April-June quarter, weaker than previous estimates and another report suggesting U.S. durable goods orders dropped 13.2 per cent in August, the biggest decline in more than three years.

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