TORONTO - The Canadian dollar closed lower Monday as TD Bank lowered its expectations for economic growth and traders weighted the chances of the Bank of Canada cutting rates further.

The loonie shed 0.26 of a cent to 80.23 cents US.

Traders also looked ahead to Wednesday's interest rate announcement by the U.S. Federal Reserve.

The Fed has been widely expected to start moving rates away from near zero around the middle of this year and traders will be looking for any sign that the U.S. central bank might move earlier.

Other major data points this week include the latest economic growth figures for Canada and the United States.

Economists believe that Canadian gross domestic product grew a slight 0.1 per cent in November, reflecting disappointing reports for manufacturing and wholesale sales. Oil prices started to collapse at the end of that month and analysts note that future GDP reports will detail how that decline is affecting the economy.

Meanwhile, the collapse in oil prices has led TD to downgrade its economic forecast. The bank now expects the Canadian economy to grow by just two per cent this year compared with its expectation in December for 2.3 per cent growth. TD said it also expects the Bank of Canada to cut its overnight rate by another quarter of a percentage point in March.

The Bank of Canada chopped its key overnight rate a quarter point last week to 0.75 per cent to deal with damage caused to the economy by falling oil prices. Some analysts are forecasting the bank could weigh in with another similar-sized cut in late spring.

Oil prices have fallen more than 40 per cent since the end of November when Saudi Arabia rejected calls to cut production in order to support prices. Overall, prices are down about 55 per cent from the highs of last summer as the marketplace works through a huge imbalance in supply and demand.

On Monday, the March crude oil contract in New York fell 44 cents to US$45.15 a barrel.

In the U.S., fourth-quarter GDP is expected to come in at an annualized rate of 3.1 per cent, down from a five per cent pace in the third quarter.

Elsewhere on commodity markets, February gold bullion faded $13.20 to US$1,279.40 an ounce while the March copper contract added four cents to US$2.54 a pound.

Markets also considered the future of the eurozone after Greece's anti-austerity opposition party won a big victory in national elections over the weekend.

Syriza party leader Alexis Tsipras has promised to renegotiate Greece's massive bailout agreements, but has vowed not to take any unilateral action against lenders from other eurozone countries.

News from © The Canadian Press, 2015