10/21/2013 08:31 EDT | Updated 01/23/2014 06:58 EST

Loonie down slightly, traders look to Bank of Canada, U.S. jobs data

TORONTO - The Canadian dollar closed slightly lower Monday, two days before the Bank of Canada makes its next announcement on interest rates.

The loonie shed 0.06 of a cent to 97.08 cents US.

Many economists expect the bank will keep its key rate at one per cent until around the fourth quarter of 2014.

Traders also looked ahead to a raft of economic reports that were held up because of the partial U.S. government shutdown that dragged on this month until late last week.

The major economic report of the week is the U.S. government’s employment report. That’s due on Tuesday and could provide investors with an indication as to when the Fed will start reducing its US$85 billion worth of monthly asset purchases.

Until the U.S. debt crisis this month, most investors thought the Fed’s so-called "tapering" of its stimulus program would start by December. Many now think it won’t start until Janet Yellen takes the chair in early 2014.

The commodity sensitive loonie failed to react to falling oil prices, which were at their lowest level since July. The November crude contract on the New York Mercantile Exchange fell $1.59 to US$99.22 a barrel — its lowest close since July 1 — amid rising supplies of crude and lower demand.

December copper was unchanged at US$3.30 a pound while December gold bullion climbed $1.20 to US$1,315.80 an ounce.

Meanwhile, traders digested data showing a drop in existing home sales in September, held back by higher mortgage rates and rising prices.

The National Association of Realtors says the number of resale homes fell 1.9 per cent last month to a seasonally adjusted annual rate of 5.29 million. That’s down from a pace of 5.39 million in August, which was revised lower. The sales pace in August equalled July’s pace. Both were the highest in four years and consistent with a healthy market.