BoC Policy Statement Benefits Loonie

The Canadian dollar gained against the euro and the Japanese yen but fell a little versus the US dollar today. The major event for the currency during Wednesday was the policy meeting of the nation’s central bank that turned out to be mildly supportive for the loonie.
The Bank of Canada left its main interest rate at 0.5 percent during the Wednesday’s meeting, as was widely expected, and issued a statement that was relatively neutral. The bank cited household spending, the falling exchange rate and the economic recovery of the United States as positive factors for growth of Canada’s economy. On the negative side, uncertainty about growth of China and falling oil prices are detrimental to Canada’s economic wellbeing.
The central bank’s balanced stance led to speculations that the BoC will not cut interest rates anymore this year after reducing them two times earlier. Such outlook is beneficial to the Canadian currency, resulting in small gains during the Wednesday’s session.
USD/CAD ticked up from 1.3207 to 1.3222 as of 17:43 GMT today. EUR/CAD declined from the open of 1.4793 to 1.4772 but bounced from the daily low of 1.4660. CAD/JPY gained from 90.68 to 91.44, and its session high was at 92.05.

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