The Canadian dollar was at a 14-month high Tuesday amid expectations that the U.S. Federal Reserve will launch another round of stimulus to help the American economy.

The loonie closed up 0.45 of a cent at 102.75 cents US, after earlier reaching 102.94, as traders also took in a strong housing report.

Canada Mortgage and Housing Corp. said housing starts came in at an annual rate of 224,900 during August. The showing was a pleasant surprise as economists had expected a decline to 200,000.

The greenback weakened ahead of the wrapup of the Fed's two-day meeting on interest rates.

The central bank could announce another round of quantitative easing Thursday, which would see the Fed print more money to buy up bonds in order to keep interest rates low and encourage lending.

Expectations that the Fed would move on another jolt for the economy increased after jobs data released Friday failed to meet modest expectations of 125,000 new jobs. Instead, the economy cranked out 97,000 jobs and employment numbers for June and July were revised downward.

Fed move uncertain

However, there is a degree of uncertainty as to whether the Fed will act now, especially as it may not want to become a key point of debate in the upcoming U.S. presidential election.

Commodities rose, with October crude on the New York Mercantile Exchange closing up 63 cents at $97.17 US a barrel.

September copper on the Nymex was up a penny at $3.71 US a pound, adding to a 17-cent gain in the past two sessions.

Copper rose amid hopes that the Chinese government will move to launch stimulus measures to arrest a slowing economy.

Addressing the World Economic Forum Tuesday, China's premier Wen Jiabao promised more tax cuts and measures to boost consumer spending.

Copper is seen as a global economic barometer as it is used in so many applications. China is the world's biggest consumer of the metal.

October bullion gained $3.10 to $1,731.80 US an ounce.