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The Royal Canadian Mint’s lucky loonie coin.Jeff McIntosh/The Canadian Press

The Canadian dollar closed little changed Tuesday as the Bank of Canada said it was keeping its key rate unchanged at 1 per cent while keeping intact language warning that it will raise rates at some point.

The currency was off 0.01 of a cent at $1.0074 (U.S.). But it had earlier traded around $1.0023, its lowest level since early August, amid speculation that the central bank's statement would contain language suggesting a less hawkish stance on raising rates.

Instead, the bank maintained the key message of previous statements — that there will need to be modest rate hikes — with the slight modification that added "over time" to the equation.

In a speech last week, Governor Mark Carney had omitted a statement that "modest withdrawal of money policy will likely be required" — leading observers to think the central bank was signalling a more definitive change to its policy.

On Tuesday, the bank also noted that it will consider the health of the household sector in setting monetary policy, something it hasn't done in previous interest rate announcements

"It not only says that a modest withdrawal of monetary stimulus will likely be required over time, but it also says that it will consider the evolution of imbalances in the household sector in judging the need to hike," observed CIBC World Markets chief economist Avery Shenfeld.

"That's a new dimension, and hints that if household debt growth fails to slow, the bank might use rate hikes to tame it."

The bank also raised its 2012 growth forecast to 2.2 per cent from 2.1 per cent.

Aside from the Bank of Canada move, "markets are shedding risk as rumours swirl that Federal Reserve chair [Ben] Bernanke will not seek another term" said Scotia Capital chief currency strategist Camilla Sutton.

Ms. Sutton also noted Monday night's presidential debate indicating that President Barack Obama had come out ahead, weak European earnings reports combined with lower forecasts from the U.S. corporate sector and "some focus on geopolitical risks."

The commodity-sensitive loonie was also affected by lower prices for oil and metals amid a move by Moody's Investor Services to downgrade five Spanish regions to below investment grade.

Spain has been the flashpoint of the euro zone's credit crisis as the country endures its second recession in three years with near 25 per cent unemployment after the property market collapsed in the wake of the 2008 financial crisis, at the same time crippling the country's banks.

In September, the European Central Bank said it was prepared to buy unlimited amounts of bonds in countries struggling with debt. This has helped Spain by pushing its borrowing costs lower. But Prime Minister Mariano Rajoy has held off triggering the actual purchases.

Oil prices headed lower as concerns about demand prospects sent the December contract on the New York Mercantile Exchange down $1.98 to a three-month low of $86.67 a barrel.

Copper prices fell back with the December contract on the Nymex down 5 cents at $3.56 a pound. December gold bullion gave back $18.30 to $1,708 an ounce. Copper is viewed as an economic bellwether as it is used in so many applications and economic worries have sent prices 18 cents or 5 per cent in the past four sessions.

December bullion gave back $16.90 to $1,709.40 an ounce, its lowest close since early September. On the corporate front, there was earnings disappointment from chemical giant duPont, while conglomerate 3M cut its 2012 profit estimate to reflect "current economic realities."

Meanwhile, the Federal Reserve started its regular two-day policy meeting Tuesday but little is expected in the midst of the U.S. election campaign.

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