Loonie Hits 9-Day High as Fed Holds Interest Rates Steady

The Canadian dollar strengthened to its strongest level in nine days against the US dollar on Wednesday after the Federal Reserve chose not to raise interest rates.

The loonie was trading 0.6% higher at 1.4024 per US dollar, or 71.31 US cents, marking its highest point since July 20.

This decision by the Fed may intensify questions about how central bank chief Kevin Warsh will deliver on his commitment to bring inflation back down to the 2% target.

American monetary policymakers opted for a wait-and-see approach instead of taking immediate action, according to Royce Mendes, head of macro strategy at Desjardins.