A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto in this January 23, 2015, file photo. The Canadian dollar pared earlier session losses against its U.S. counterpart on Tuesday, strengthening after data showed January growth was better than feared. REUTERS/Mark Blinch/FilesMARK BLINCH/Reuters
The Canadian dollar closed at 75.92 (U.S.) up 0.43 cents from Tuesday.
Oil gave a boost to the loonie. West Texas Intermediate (WTI) crude's October contract settled at $47.15 (U.S.) up $2.56 from Tuesday. The rally emerged after the largest U.S. crude drawdown in seven months at the key delivery point in Cushing, Oklahoma. Official data from the U.S. Energy Information Administration showed a total U.S. inventory drop of 2.1 million barrels for the week ended Sept. 11. The Cushing draw itself was 1.9 million, the largest since the week ended Aug. 28. The draw numbers were bullish beyond average analysts' forecasts.
The energy sector was the main driver on the S&P/TSX composite which closed up more than 300 points or more than 2 per cent.
Traders started the day with the release of Canadian manufacturing sales data for July which was up a better-than-expected 1.7 per cent. The loonie gained 50 basis points after that news first thing this morning.
All eyes are now on the U.S. Federal Reserve. The Federal Open Market Committee kicked off their two day meeting on Wednesday. On Thursday at 2 pm they will make their highly anticipated interest announcement. If the Fed raises rates the loonie would be under pressure as the U.S. dollar would be stronger.
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