The Canadian dollar jumped today after the Bank of Canada issued a rather optimistic statement following its monetary policy meeting. The currency reached the highest level since January against the Japanese yen.
The BoC left its main interest rate at 1 percent today. Regarding the global economy, the central bank noted faltering recovery in the European Union, caused by the negative impact of the situation in Ukraine on confidence, but also mentioned signs of solid economic growth in the United States. As for domestic economic developments, the bank was rather optimistic, saying that economic activity picked up after slowdown in winter, matching expectations.
The BoC concluded in the statement:
Overall, the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished. The balance of these risks is still within the zone for which the current stance of monetary policy is appropriate and therefore the target for the overnight rate remains at 1 per cent. The Bank remains neutral with respect to the next change to the policy rate: its timing and direction will depend on how new information influences the outlook and assessment of risks.
USD/CAD slid from 1.0927 to 1.0874 as of 16:47 GMT today. EUR/CAD tumbled from 14350 to 1.4287. CAD/JPY advanced from 96.16 to 96.44, trading near the highest level since January 10.
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