Canadian Dollar Tumbles on Rates Outlook

The Canadian dollar fell today after the nation’s central bank left interest rates unchanged at an all time record low, declining rate hikes speculations despite the favorable economic data published in Canada during the past few weeks.

The loonie dropped versus most of the 16 most traded currencies today after the central bank affirmed that interest rates will remain unchanged until June, decreasing sharply the attractiveness for the loonie as traders expected the good performance of the Canadian economy to produce more immediate results in terms of interest rate hikes. The Bank of Canada also made a statement against the loonie’s strength, which, according to its officials, is a threat to the economic growth in the North American nation, forcing the loonie down specially versus its a stronger greenback that advanced versus all of the 16 main traded currencies.

The lack of a hawkish tone in Canada’s central bank declarations affected the outlook for the loonie, which have been gaining on speculations that stronger economic conditions in the country would allow the BOC to raise interest rates sooner than expected, but its dovish position and against a strong loonie will certainly be an obstacle for loonie’s further advances.

USD/CAD traded at 1.0320 as of 15:28 GMT from a previous rate of 1.0255 in the intraday comparison. CAD/JPY traded at 88.24 from 88.45.

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