The loonie was down 0.08 of a cent to 91.24 cents US as Statistics Canada reported that Canadian GDP grew 0.2 per cent in February, which was in line with expectations. That translated to annualized growth of 2.5 per cent.
Meanwhile, the U.S. Federal Reserve wrapped its two-day interest rate meeting and judged the American economy strong enough to allow further easing of the central bank's bond purchases, cutting the monthly purchases by another $10 billion to $45 billion.
The Fed also reaffirmed its plan to keep short-term interest rates low to support the economy “for a considerable time” after its bond purchases end, likely late this year.
It also said that growth in economic activity had picked up recently.
That assessment came on the same day that data came out showing U.S. economic growth for the first quarter fell far short of expectations as a result of severe winter weather. Gross domestic product grew by only 0.1 per cent, against the 1.2 per cent annualized gain that had been expected.
There was positive employment news two days before the release of the U.S. government's employment report for April. Payroll firm ADP said that the private sector created 220,000 jobs over the month. Economists generally expected the economy created a total of about 210,000 jobs.
Canadian employment data for April will be released May 10.
Markets also considered comments Tuesday from Bank of Canada governor Stephen Poloz that Canada is missing out on about $40 billion in export sales and could continue to do so for years to come as uncompetitive producers continue to lose market share.
The central banker, who testified before the Commons finance committee, said the bottom line is that the “wedge” that has opened up in the non-energy export sector is the new reality and is not going away in the near future. Poloz said that the loss in export capacity has been the principal reason Canada’s economy continues in the slow lane at about two per cent growth and Canadian firms have been holding back on investments and hiring.
On the commodity markets, June crude in New York was down $1.54 to US$99.74 a barrel.
June gold declined 40 cents to US$1,295.90 an ounce while July copper shed five cents to US$3.03 a pound.