The loonie closed at 94.97 cents US.
The bank is widely expected to leave its key rate unchanged at one per cent, where it has been since September 2010. As usual, traders will focus on the language in the accompanying statement for any indication that the central bank will move on rates before late 2014.
Traders also weighed the chances of President Barack Obama getting congressional approval for punishing Syria for a sarin gas attack outside Damascus last month.
U.S. intelligence says the attack killed 1,429 people. A vote could come once Congress returns from its summer break, which is scheduled to end Sept. 9.
Jobs data will also weigh on markets this week.
Statistics Canada is expected to report Friday that the economy created about 30,000 jobs in August.
But markets are especially anxious to see how U.S. job creation fared in August. The consensus calls for the American economy to have cranked out about 180,000 jobs but recent data showing continuing declines in the numbers of people applying for jobless benefits have led some to think that number could be much higher.
In any event, traders hope the data will provide another clue as to whether the U.S. Federal Reserve will start to pare its monthly US$85 billion of bond purchases, which have kept long term rates low and fuelled a strong rally on many stock markets.
The U.S. dollar appreciated earlier in the day on a much better than expected reading on American manufacturing.
The Institute for Supply Management's index rose to 55.7 from 53 in July, much stronger than the 54 reading that had been expected.
On the commodity markets, oil prices erased declines following the release of the U.S. manufacturing data.
The October crude contract on the New York Mercantile Exchange closed up 89 cents at US$108.54 a barrel.
Copper prices ran ahead following two reports released Monday that showed China’s manufacturing sector improved last month after prolonged weakness. China is the world's biggest consumer of copper, which itself is an economic barometer as it is used in so many applications.
The HSBC purchasing managers’ index rose to 50.1 points in August, a level that indicates expansion as output and new orders edged up slightly and order backlogs rose at the fastest pace in two years. The official China Federation of Logistics and Purchasing PMI also showed increasing expansion, rising to 51 from July’s 50, which was the highest level in 16 months.
December copper gained seven cents to US$3.30 a pound.
Gold bullion prices shed early losses and the December contract gained $15.90 to US$1,412 an ounce.