TORONTO – The Canadian dollar was higher Monday as traders look for clarity on whether the U.S. Federal Reserve thinks economic conditions are favourable enough to start easing up on some stimulus.

The loonie was up 0.13 of a cent to 98.47 cents US amid mixed commodity prices.

Markets have been volatile since late May when Fed chairman Ben Bernanke said the central bank would consider cutting back on its US$85 billion of bond purchases each month if economic data — particularly job growth — improved.

The stimulus measures, known as quantitative easing, have kept interest and bond yields low and kept a rally going on stock markets practically non-stop since late last year.

Speculation that the Fed will be begin to reduce bond purchases in a process often called tapering has pressured equity indexes while bond yields have been rising, pushing mortgage rates higher.

The Fed meeting wraps up Wednesday afternoon, followed by a news conference by Bernanke and analysts expect the central bank won’t be in a rush to do anything about stimulus just yet.

“We expect Bernanke will want to use the press conference to re-assure markets of the prolonged process between a possible taper (in buying bonds) and an eventual rate hike,” said Mark Chandler, Head of Canadian FIC Strategy at RBC Dominion Securities.

Commodity prices were mixed Monday as July crude on the New York Mercantile Exchange gained 25 cents to US$98.10 a barrel.

July copper declined one cent to US$3.19 a pound and August bullion fell $4.80 to US$1,382.80 an ounce.