FOREX-U.S. dollar inches up, Canadian dollar sinks; pound, Aussie rise

Wed Jan 22, 2014 4:05pm EST
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* UK jobs data drive sterling higher

* Australian dollar jumps as inflation pares rate-cut risk

* Canadian dollar drops to more than 4-year low

By Gertrude Chavez-Dreyfuss

NEW YORK, Jan 22 (Reuters) - The dollar edged higher on Wednesday, helped by sharp gains against the Canadian currency as the greenback's outlook stayed upbeat, with the Federal Reserve possibly a week away from its next round of reduction in asset buying.

The U.S. currency jumped to its highest in more than four years versus the Canadian dollar after the Bank of Canada left the door open about a possible interest rate cut and said the unit remained strong despite recent depreciations.

"The BoC policy announcement today was about as dovish as it could possibly be without moving to an outright easing bias," said Shaun Osborne, chief currency strategist, at TD Securities in Toronto.

"We remain bullish on the outlook for the U.S. dollar against the Canadian dollar. The policy outlook favors more U.S. dollar strength and more Canadian dollar weakness."   Continued...