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Loonie closes almost a half cent higher ahead of rate decision

The Royal Canadian Mint unveiled the 2012 lucky loonie coin in Calgary, Alta., Thursday, July 19, 2012.

Jeff McIntosh/THE CANADIAN PRESS

The Canadian dollar closed higher on Tuesday as traders awaited the first Bank of Canada policy decision under new Governor Stephen Poloz.The loonie ended the session up 0.45 of a cent to 96.47 cents (U.S.).

The central bank is widely expected to keep its key interest rate on hold at 1 per cent when it makes the announcement Wednesday morning. The near certainty means that focus will be more so on what Mr. Poloz says, rather than what he does.

It leaves "the debate centred on whether Governor Poloz will shift to a neutral stance or retain the slight hawkish bias," Scotia Capital chief currency strategist Camilla Sutton said in a note.

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Also expected Wednesday is testimony from U.S. Federal Reserve chairman Ben Bernanke about the U.S. economy that could set the tone in markets for the rest of the summer.

In commodities, the August crude contract on the New York Mercantile Exchange weakened 32 cents to $106 a barrel.

August bullion rose $6.90 to $1,290.40 an ounce while the TSX gold sector rose 3.1 per cent. The September copper contract on the Nymex gained 4.2 cents to $3.187 a pound.

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