October 29, 2013 - 5:31 AM
TORONTO - The Canadian dollar was slightly higher Tuesday as the currency continues to recover from last week's mauling, sparked by indications that interest rate hikes are off the table until 2015.
The currency rose 0.12 of a cent to 95.86 cents US.
The loonie had tumbled 1.5 cents last week after the Bank of Canada changed its bias from tightening to neutral while forecasting lower than expected economic growth through 2015.
Central banks continue to be in focus as traders also looked to the start of a scheduled, two-day interest rate meeting of the U.S. Federal Reserve. They are particularly interested in the Fed's wrap-up announcement for any hints as to when the central bank might start to move on cutting back on key stimulus involving the monthly purchase of US$85 billion of bonds.
Markets had previously expected the withdrawal of stimulus to begin this year but expectations have shifted to next year as the pace of improvement in the U.S. economy faded. Also, economists are still trying to gauge the cost of the political wrangling earlier this month that resulted in a partial shutdown of the U.S. government.
Traders also looked ahead to the major piece of Canadian economic data coming out this week. Statistics Canada was expected to report Thursday that gross domestic product grew by a respectable 0.2 per cent during August.
Commodities were mixed with the December crude contract on the New York Mercantile Exchange down 64 cents to US$98.04 a barrel.
December bullion declined $9.20 to US$1,343 an ounce while December copper rose a penny to US$3.28 a pound.
News from © The Canadian Press, 2013