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Canadian dollar moves higher on stronger wholesale trade data, US Fed meeting

TORONTO – The Canadian dollar was higher on Tuesday as a report on wholesale sales came in stronger than expected while investors are also anticipating a move by the Federal Reserve to boost confidence in the U.S. economy.

The loonie gained 0.56 of a cent to 98.21 cents US.

Statistics Canada reported that wholesale trade sales rose 1.5 per cent in April to $49.3 billion, its fastest pace of growth in nearly a year.

The outcome was well above expectations, mainly due to a huge increase in sales of agricultural supplies.

Meanwhile, the Fed began a two-day meeting that some expect will result in an extension to the $400-billion Operation Twist plan under which it sold short-term securities and replaced them with long-term securities in an effort to put more downward pressure on long-term rates.

A decision will likely be made on Wednesday.

In commodities, the July crude contract on the New York Mercantile Exchange rose 76 cents to US$84.03 a barrel.

July copper was down half a cent at US$3.43 a pound, while August gold was down $5.40 at US$1,6221.60 an ounce.