Article by ForexTime
The Canadian dollar strengthened on Wednesday after the Bank of Canada announced it maintained its benchmark interest rate at 0.5 per cent.
The loonie gained about half a cent versus the greenback on the announcement as investors were surprised, since they were expecting a rate cut and priced it into the value of the currency ahead of the decision. The central bank cut its rate twice last year in an attempt to stimulate the economy.
The Canadian dollar finished the day up at 69.03 cents US, as investors were pleased to hear that the BoC sees
modest growth ahead. The bank expects Canada’s economy to grow by 1.5 per cent this year and 2.5 per cent in 2017.
Canada is a major oil producer and exporter and the slump in oil prices has led to the Canadian dollar tumbling to a twelve-year low against the US dollar. The currency snapped its 13-day slide after the BoC held rates.
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