Canadian dollars.JONATHAN HAYWARD/The Canadian Press
The Canadian dollar closed lower Thursday, giving back all of the strong gains of the previous session on indications that the Bank of Canada won't be cutting rates again any time soon.
The loonie was ended 0.58 of a cent at 79.96 cents (U.S.) after the Bank of Canada said it was keeping its key rate unchanged at 0.75 per cent. The central bank had surprised markets with a quarter-percentage-point cut in January to counter the effects of the collapse of oil prices on the economy.
"The bank is in wait-and-see mode, leaving the central bank data dependent," observed Camilla Sutton, chief foreign exchange strategist at Bank of Nova Scotia.
She said the bank will be keeping a close eye on how oil prices are affecting the broader economy while looking for evidence "of how the non-energy economy is unfolding, making next week's trade and employment releases important."
Sutton also noted that financial stability risks are unfolding, which makes housing data particularly important.
The loonie lost ground and the greenback appreciated across the board as European Central Bank head Mario Draghi said the ECB would start its €1.1-trillion bond purchase program to stimulate the recovery and raise the rate of inflation from a dangerously low 0.3 per cent. The ECB will buy €60-billion a month in government and corporate bonds starting Monday.
Draghi also said that the bank was raising its growth forecast for this year to 1.5 per cent from 1.0 per cent.
Meanwhile, traders awaited the major U.S. economic event of the week: the release Friday of the government's employment report for February. Economists expect the American economy created about 235,000 jobs last month. Canadian employment data for February will be released March 13.
On the commodity markets, April crude in New York slipped 77 cents to $50.76 a barrel.
Metals were mixed with May copper down a penny at $2.65 a pound while April gold faded $4.70 to $1,196.20 an ounce.