Loonie rises after string of losses amid uncertainty on interest rate hike

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TORONTO - The Canadian dollar was higher Tuesday after a string of losses following the Bank of Canada's signal last week that it will be slower to raise interest rates than anticipated.

The loonie rose 0.08 of a cent to 99.43 cents US following a flat close on Monday.

The dollar had tumbled about 1.4 cents US in the previous three sessions after the central bank indicated last Wednesday that Canada's economy was weaker than expected and the bank will be slower to raise interest rates.

The announcement pushed the currency below parity with the greenback for the first time since mid-November. Higher rates tend to attract investors and push up the currency.

Meanwhile, traders looked ahead to the latest reading on Canadian economic growth later in the week.

On Thursday, Statistics Canada is expected to report that gross domestic product grew by 0.2 per cent during November, up from 0.1 per cent in October.

Elsewhere on the economic front, traders are looking for the latest Case-Shiller House Price Index and the Conference Board's reading on consumer confidence.

The U.S. Federal Reserve starts its two-day meeting on interest rates Tuesday. No one expects the central bank to move on rates but traders will look for clues as to when the Fed might end its latest round of economic stimulus.

The key piece of data for the week comes out Friday. Economists generally expect the U.S. non-farm payrolls report to show that the economy created 153,000 jobs in January, slightly below December’s 155,000 reading.

Traders will also take in the latest readings on U.S. economic growth during the week.

Commodity prices were mixed as the March crude contract on the New York Mercantile Exchange added 23 cents to US$96.67 a barrel.

March copper on the Nymex was unchanged at US$3.66 a pound while February gold gained $9.30 to US$1,662.20 an ounce.

Organizations: Bank of Canada, U.S. Federal Reserve, Statistics Canada Shiller House New York Mercantile Exchange Nymex

Geographic location: U.S., TORONTO, Canada

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