Canadian dollar pops above 83 cents US as markets await Fed news

The Canadian dollar jumped above 83 cents US on Tuesday as investors drifted away from the U.S. dollar ahead of an announcement by the U.S. Federal Reserve.

The loonie was at 83.13 US cents, up a half a cent, at the close, its highest level since mid-January.

The Fed is due to give a fresh assessment of the U.S. economy and its latest interest rate announcement on Wednesday.

Most analysts believe the Fed will not move to raise U.S. interest rates until later in the year. The U.S. is turning in disappointing data in the first quarter, including slower than expected economic growth and lower corporate earnings.

U.S. confidence down

A report today says U.S. consumer confidence fell in April as people reined in spending plans. The Conference Board said U.S. consumer confidence was at the lowest level in four months, knocked down by a slowdown in hiring,

That helped to push down the U.S. dollar against the euro and the Canadian dollar.

Meanwhile, oil gained ground – often a positive for the petro-sensitive loonie.

West Texas Intermediate, the most common North American contract, was up four cents at $57.03 US a barrel.

Bank of Canada governor Stephen Poloz repeated his soothing message about the economy today before parliamentarians, saying he expects he will not have to cut rates again in Canada.

He also said he expects a rebound in the Canadian economy in the second half of the year.

That echoes a message from Finance Minister Joe Oliver who said Tuesday that first-quarter economic performance was be weak but he believed growth would resume and reach 2.0 per cent for 2015.

Oliver said the low Canadian dollar is helping some sectors of the Canadian economy, including manufacturing.