TORONTO - The Canadian dollar was lower Wednesday as the Bank of Canada kept its key rate unchanged at one per cent.
The loonie was down 0.29 of a cent to 91.37 cents US as the central bank signalled it is in no rush to raise rates from that level, where it's been since September 2010 as the global economy continues its slow recovery.
Traders also looked to data showing Canada's trade balance slipped into deficit territory during April.
Statistics Canada said Canada's merchandise exports declined 1.8 per cent while imports increased 1.4 per cent, taking Canada's trade balance with the world from a surplus of $766 million in March to a deficit of $638 million.
Traders also looked ahead to the announcement of stimulus measures to help the eurozone recovery and the release of U.S. and Canadian jobs numbers coming out at the end of the week.
Markets are counting on European Central Bank president Mario Draghi to announce measures Thursday aimed at giving a lift to the eurozone's weak recovery and saving the region from falling into a deflationary spiral that would choke off growth.
Worries about deflation increased Tuesday in the wake of data showing that inflation in the eurozone came in at 0.5 per cent in May, down from 0.7 per cent in April. The latest data also showed that gross domestic product in the eurozone grew by a paltry 0.2 per cent in the first quarter.
Analysts are looking at a variety of options for the ECB, including an interest rate cut or a form of quantitative easing.
Traders are looking for a strong reading from the U.S. non-farm payrolls report coming down Friday morning, with economists forecasting that about 219,000 jobs were created during May following a much stronger expected 288,000 gain in April.
Ahead of that report, payroll firm ADP reported Wednesday that the U.S. private sector created 179,000 jobs last month.
Canadian job figures for May also come out Friday and economists expect about 21,000 jobs were created after the economy shed 29,000 the previous month.
On the commodity markets, the July crude contract on the New York Mercantile Exchange gained 85 cents to US$103.51 a barrel.
August bullion climbed $2.10 to US$1,246.60 an ounce and July copper fell five cents to US$3.09 a pound.