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Loonie closes higher after Bank of Canada comments on economy

A Canadian dollar or looni

Jonathan Hayward/THE CANADIAN PRESS

The Canadian dollar ended slightly higher Wednesday after a widely expected decision by the Bank of Canada to keep its key interest rate unchanged.

The loonie picked up 0.21 of a cent to close at 87.98 (U.S.) after the decision, which maintained the interest rate at 1 per cent.

The central bank said the health of the domestic economy faces risks from declining oil prices and high household debt, although the Canadian economy shows signs of a broadening recovery.

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CIBC World Markets economist Nick Exarhos said the comments indicates the Bank of Canada "still sees these pressures as largely temporary."

"The statement did sound more sanguine on the U.S. economy as pertains to the lift it will provide to Canadian exports," Exarhos wrote in a note.

Elsewhere, the January crude contract on the New York Mercantile Exchange was up 50 cents to $67.38 a barrel.

February bullion moved ahead $9.30 at $1,208.70 an ounce, while March copper was down 2 cents at US$2.87 a pound.

On Friday, November job figures will be released from both Canada and the United States, offering further insight into the momentum behind economic growth.

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