A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto in this January 23, 2015, file photo. The Canadian dollar pared earlier session losses against its U.S. counterpart on Tuesday, strengthening after data showed January growth was better than feared. REUTERS/Mark Blinch/FilesMARK BLINCH/Reuters
The Canadian dollar closed at 75.73 cents (U.S.), up 0.34 cents from Friday.
Tuesday was the first trading day of the week as North American markets were closed Monday for Labour Day on both sides of the border.
The Canadian dollar was up as the price of West Texas Intermediate (WTI) crude was flat. Trading started off volatile, but ended with oil closing down a mere 11 cents (U.S.) at $45.94. At one point WTI crude was trading as low as $44.41. Last week WTI crude climbed 1.8 per cent.
An afternoon rally on the Shanghai Composite Index failed to impact the loonie. China's main market was up 2.92 per cent on Tuesday.
On Wednesday, Statistics Canada announces building permits data for July, 2015. Then, at 10 am ET, the Bank of Canada will announce its decision on the overnight target rate. Economists expect the Bank of Canada will hold rates at 0.5 per cent, which should have little impact on the Canadian dollar.
The loonie may be under more pressure later this month. On Tuesday, in his economic insights note called "A Spoon Full of Sugar," CIBC chief economist Avery Shenfeld writes, "The Canadian dollar doesn't have much going for it, other than the gradually diminishing odds of a further Bank of Canada rate cut. In the near term, we see a further loonie depreciation following a Fed hike and the political uncertainties associated with a minority government likely in Ottawa."
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