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A Canadian dollar or loJonathan Hayward/The Canadian Press

The Canadian dollar closed higher Tuesday amid rising oil prices and a surprise move by Russia's central bank to defend the ruble.

The loonie edged up 0.15 of a cent to end at 85.94 cents (U.S.) as traders also digested data showing Canadian manufacturing sales declined 0.6 per cent in October to $52.7-billion (Canadian). It was only the second decrease in 2014. The drop reflected lower production of aerospace products and parts and a decrease in primary metal sales.

The currency had dropped two-thirds of a U.S. cent Monday, squeezed by a greenback that strengthened ahead of Wednesday's rate announcement by the U.S. Federal Reserve and falling prices for oil and metals.

The January crude contract in New York erased early losses to inch up 2 cents to $55.93 (U.S.) a barrel following a drop of almost $2 on Monday. Oil rose even as the HSBC manufacturing purchasing managers index for China slipped 0.5 points to a seven-month low of 49.5.

China's growth fell to a five-year low of 7.3 per cent last quarter.

Oil prices have collapsed since mid-summer, down about 50 per cent amid a huge supply/demand imbalance.

Also focusing financial markets Tuesday was a surprise move by Russia's central bank, which raised its key interest rate to 17 per cent from 10.5 per cent in a move to prop up the ruble, which has lost half of its value this year, in large part because of Western sanctions and plunging oil prices.

It's the biggest interest rate hike since 1998, a year when Russia defaulted on its sovereign bonds.

But the move was in vain as the ruble lost further ground against the greenback.

Elsewhere on commodity markets, February gold saw early gains evaporate and bullion fell $13.40 to $1,194.30 an ounce. March copper dipped 2 cents to $2.86 a pound.