TORONTO _ The Canadian dollar headed higher Tuesday ahead of a key speech from the Bank of Canada on foreign exchange rates.
The loonie was up 0.25 of a cent to 90.75 cents US.
Bank governor Stephen Poloz is expected to deliver a speech on the role of the floating exchange rate in Canada at 12:30 p.m. ET, followed by a press conference. Traders will be especially interested in what Poloz has to say about how the currency ties in with exports and the country's continued economic recovery.
``The topic is not a new one, as it is a core piece of the BoC's monetary framework and has been widely discussed by almost every governor,'' said Camilla Sutton, chief FX strategist and managing director at Scotiabank Global Banking and Markets.
Meanwhile, the latest Canadian manufacturing sales figures showed that there are still signs that the recovery is faring as expected.
Statistics Canada said manufacturing sales rose 2.5 per cent to $53.7 billion in July, exceeding the previous record of $53.2 billion set in July 2008.
The agency said the July gain was mainly due to higher sales in the transportation equipment and primary metals industries.
Economists had expected a gain of one per cent, according to Thomson Reuters.
One of the other major economic events this week is Wednesday's interest rate announcement by the U.S. Federal Reserve. Traders will be looking to see if the U.S. central bank will give any hints on whether it will raise interest rates sooner than mid-2015, when it is generally expected that short-term rates will start to head up from near zero, where they have been since the financial crisis.
The Fed has long reassured markets that ``it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends.''
The bond buyback program involving the purchase of hundreds of billions of dollars of bonds is widely expected to finish at the end of October.
Overseas, there continues to be uncertainty in the markets about the outcome of Thursday's referendum on Scottish independence. The result is generally believed to be too close to call. A yes vote would result in huge complications from currency to membership in the European Union and NATO.
In commodity markets, the October crude contract in New York dipped 12 cents to US$92.80 a barrel. December copper jumped two cents to US$3.10 a pound, while December gold bullion gained $1.20 to US$1,236.30 an ounce.
Follow (at)LindaNguyenTO on Twitter.