TORONTO _ The Canadian dollar was higher Thursday, a day after the Bank of Canada announced it was not planning to move on interest rates and hinted that such moves will probably not come until next year.
The loonie gained 0.44 of a cent to 91.28 cents US as the central bank left its key rate unchanged at one per cent, where it has been for four years.
The central bank confirmed that it thought a previous rise in inflation was due to temporary factors, even though it warned that household debt still remains high, while the housing market continues to stay stronger than expected.
``This is a slight shift to the more hawkish side; however from the currency perspective this is offset by the ongoing focus on the importance of exports in driving business investment and growth and accordingly highlights the importance of the level of CAD (Canadian dollar),'' said Camilla Sutton, chief FX strategist, in a research note Thursday.
Sutton added that all eyes will be on comments from Governor Stephen Poloz when he makes a speech on September 16. Markets had generally expected the central bank to start upping rates around the middle of next year.
Meanwhile, overseas, the European Central Bank says it will start a new stimulus program that involves buying financial assets to salvage a weak economic recovery.
In a press conference after the ECB said it had cut two key rates, President Mario Draghi said the bank would start purchases of asset-backed securities and covered bonds in October.
Asset-backed securities are based on investments such as loans to companies and mortgages. Buying them would stimulate the market for such bonds and for banks to make the loans that make up the assets.
And it's a heavy week for economic data in North America with traders focused on the release Friday of the U.S. government's employment report for August. Economists forecast that the American economy created about 220,000 jobs last month. Investors hope the data will provide further clues about when the U.S. Federal Reserve may start to hike interest rates.
On Thursday, the U.S. Labor Department says slightly more Americans sought unemployment benefits last week, but the total number of people receiving jobless aid remains at its lowest level in more than seven years.
Applications for jobless aid rose 4,000 to a seasonally adjusted 302,000. The four-week average, a less volatile measure, increased 3,000 to a still-low 299,750. A steady decline over the summer in applications means that 2.46 million people collected benefits last week, the lowest total since June 2007, a few months before the Great Recession began.
Canadian jobs data will be released Friday.
On the commodity markets, October crude fell $1.02 to US$94.52 a barrel.
December gold bullion lost 30 cents to US$1,270 an ounce, while December copper jumped four cents to US$3.16 a pound.
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