Canadian dollar moves above 76 cents US after rate decision

The Canadian dollar moved above 76 cents US for the first time in two weeks Thursday afternoon after the Fed announcement it was leaving its trend-setting interest rate unchanged.

A U.S. rate hike would have put pressure on the loonie as Canada has cut its rates twice this year.

In late afternoon, the Canadian dollar was valued at 76.17 US cents, but it sank to 75.87 at the close.

Colin Cieszynski, chief market strategist at CMT Markets, predicts weakness in the U.S. currency and a stronger loonie after this decision.

"One of things driving up the U.S. dollar and keeping the loonie down has been anticipation of a fairly aggressive interest rate hike program from the U.S. Not only are they going to hold off on interest rates, but when they do raise them it will be at a fairly gradual pace," he said.

The Fed's statement was optimistic about the U.S. economy and that might also be good news for Canada as U.S. growth is helping our exports. 

The Fed's announcement led to a brief spike in stock prices then they came down again.

In Toronto, the TSX index gained 15 points to 13,779. The TSX has gained 3.2 per cent in the past three days, mainly because of oil's recovery from levels under $44 US a barrel.

In Shanghai, the stock market continues to fall, sinking 2.1 per cent today to 3,086.

But investors weren't looking at China today. Instead all eyes are on Janet Yellen's announcement.

Crude, which has been volatile for weeks,moved down only slightly. The West Texas Intermediate contract fell 32 cents to $46.83 US a barrel.