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Canadian dollars. (Paul Chiasson/The Canadian Press)
Canadian dollars. (Paul Chiasson/The Canadian Press)

Loonie closes higher after series of sharp declines Add to ...

The Canadian dollar closed higher Thursday as the currency continued to stabilize following a string of sharp declines.

The loonie was up 0.16 of a cent to 91.53 cents (U.S.) after a flat performance the previous session.

But the currency has slid almost 3 per cent so far this year amid disappointing trade and employment data and a dovish stance by the Bank of Canada on interest rates.

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Also, the U.S. dollar has trended higher as the Federal Reserve starts to cut back on its massive bond purchases that have kept long-term rates low and encouraged a strong rally on equity markets.

The Fed has cut monthly bond purchases by $10-billion to $75-billion, but says further tapering depends on the strength of the economy, particularly job creation.

Traders are now looking ahead to next Wednesday’s Bank of Canada interest rate announcement for further indications of what the central bank might do about rates. There are some analysts who expect the central bank to cut rates this year.

On the commodity markets, February crude on the New York Mercantile Exchange slipped 21 cents to $93.96 a barrel.

March copper declined 2 cents to $3.34 a pound while February bullion gained $1.90 to $1,240.20 an ounce.

On the economic front, the U.S. consumer price index rose a slight 0.3 per cent in December, translating into an annualized rate of 1.5 per cent.

And the U.S. Labour Department said claims for jobless benefits declined last week by 2,000 to 326,000, which was in line with expectations.

This is the first glimpse of the job market since the release last Friday of disappointing employment data that showed job creation coming in at 74,000, far less than the 200,000 that had been expected.

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