Loonie up, U.S. Fed vows to be "patient" in raising interest rates, oil lower

TORONTO - The Canadian dollar closed higher Thursday, but off session highs as oil prices turned lower while the greenback was generally lower after the U.S. Federal Reserve promised to be "patient" in determining when to raise its key interest rate.

The loonie rose 0.31 of a cent to 86.23 cents US a day after the Fed ended its latest interest rate meeting.

It has been generally expected the Fed will move to hike rates sometime next year, around mid-2015. But a string of strong economic data points, including November's blowout employment report, had suggested the Fed could move to increase rates sooner.

In addition to saying that it will be "patient" in deciding when to do so, Fed chairwoman Janet Yellen said she didn't foresee a rate hike in the first quarter of 2015. The Fed also said that the timing of such increases depends on economic data.

Oil prices ticked lower following two days of gains as the market continues to sort out a huge supply/demand imbalance that has cut prices by almost 50 per cent since summertime highs. The January crude contract on the New York Mercantile Exchange fell $2.36 to US$54.11 a barrel.

Metals were mixed with March copper down two cents to US$2.85 a pound while February gold gained 30 cents to US$1,194.80 an ounce.