By Deborah Levine
NEW YORK (MarketWatch) -- The Canadian dollar pared gains against the U.S. currency on Tuesday after the country's central bank said it would keep its overnight lending rate at 1%. Bank of Canada officials said risks to the global economic recovery have increased, while Canada's recovery appears slightly weaker than officials projected in October. They also said persistent strength in the Canadian dollar could dampen the recovery. "As long as dollar-Canada is trading near parity, the Bank of Canada will not be willing to raise interest rates," said Kathy Lien, director of currency research at GFT. The U.S. dollar was weaker against many major currencies already, falling 0.3% to buy C$1.0036.
