Canadian dollar falls ahead of rate call The Canadian dollar slipped against its US counterpart ahead of a decision over whether to cut interest rates by the Bank of Canada, as traders waited to see whether the central bank would strike a more dovish tone. Interest rates were widely expected to be held at 1 per cent when the BoC announces its decision at 2pm BST. But investors have taken a more cautious approach to the so-called loonie after a speech by Mark Carney, governor of the BoC, last week that was more dovish than expected, as slowing inflation weighed on the economy. The US dollar rose 0.3 per cent to $0.9955. We expect the BoC to keep its overnight lending rate unchanged at 1 per cent. However, a watering down of the explicit tightening bias would seem to be warranted given core CPI has significantly undershot forecasts made in the previous monetary policy report," said analysts at UBS. The US dollar rose briefly above Y80 against the Japanese yen as speculation that Tokyo could try to weaken its currency continued ahead of a meeting by the Bank of Japan next week. However, it was later 0.2 per cent lower on the day at Y79.81. The euro fell 0.3 per cent to $1.3020 against the dollar as Moody's, the rating agency, downgraded five Spanish regions including Catalonia and Andalucia following regional elections in Spain at the weekend. The US dollar was stronger overall against other major and emerging market currencies as sentiment towards risk turned mildly negative on concerns over the economic health of China ahead of manufacturing data due for release on Wednesday. Losses for the Russian rouble were capped following a sharp drop in the previous session against the US dollar. The losses came after BP, the British oil company, agreed to sell its stake in TNK-BP to Russian oil giant Rosneft, leading traders to sell the rouble on expectations of a foreign exchange transaction to settle the deal. The rouble was more stable on Tuesday, remaining flat at Rbs31.1448, as some analysts argued the moves would only be temporary. "Fundamental drivers can quickly reverse the one-off effect of the announcement as the daily trading volume usually far exceeds the takeover volume," said analysts at Commerzbank.