Loonie closes unchanged as traders await U.S. rate news

The Canadian dollar closed unchanged Friday with markets cautious ahead of key economic happenings next week.

The loonie ended the session at 89.02 cents (U.S.).

The interest rate meeting of the U.S. Federal Reserve is the major event as markets will be curious to see if the Fed decides to postpone the end of a key stimulus program, its massive purchases of bonds.

The Fed has been winding down the program, which has kept long-term rates low and fuelled a strong rally on stock markets.

There has also been a high degree of speculation about when the Fed might raise interest rates once the so-called quantitative easing ends. Markets generally have expected a Fed interest rate hike some time in 2015, with sentiment pointing to mid-year if the bond-buying program ends this month.

"As global growth fears took hold, the expectations shifted and were pushed out until late 2015 – now these are being pulled back in, sitting at October, 2015, for the first [rate] hike," said Camilla Sutton, chief foreign exchange strategist at Bank of Nova Scotia.

Traders also looked ahead to the first reading of third-quarter gross domestic product in the United States and August GDP data for Canada.

On the commodity markets, December crude dropped $1.08 to $81.01 a barrel, while December copper was unchanged at $3.04 a pound and December gold bullion rose $2.70 to $1,231.80 an ounce.