Canadian Dollar gains after Bank of Canada keeps rates unchanged
- USD/CAD falls to around 1.3875 on Wednesday, losing 0.15% on the day.
- The Bank of Canada keeps its policy rate unchanged at 2.25%, as widely expected.
- The central bank highlights increased upside risks to inflation, while fresh tariff threats cloud the growth outlook.
USD/CAD falls to around 1.3875 on Wednesday, down 0.15% on the day, following the Bank of Canada’s (BoC) monetary policy decision. The Canadian Dollar (CAD) strengthens against the US Dollar (USD) after the central bank leaves its policy rate unchanged at 2.25%, in line with market expectations.
The BoC keeps its overnight rate unchanged but highlights a particularly uncertain economic environment in its policy statement. The central bank notes that the conflict in the Middle East and the situation surrounding US tariffs remain fluid, with both factors potentially affecting the outlook for the Canadian economy.
On the domestic front, the Bank of Canada says that demand for labour remains subdued and that several indicators continue to point to excess supply in the economy. This weakness limits the need for tighter monetary policy as Canadian economic activity continues to face headwinds.
However, the central bank appears more attentive to price pressures, noting that upside risks to inflation have increased. At the same time, new US tariffs and threats of further measures are adding to uncertainty surrounding the growth outlook and the sustainability of the economic recovery.
This combination of inflation risks and a more uncertain growth outlook complicates the path for monetary policy. Keeping the policy rate at 2.25% allows the BoC to maintain a wait-and-see stance as it assesses the impact of trade and geopolitical tensions on the Canadian economy.
Investors now turn their attention to Bank of Canada Governor Tiff Macklem’s press conference. Markets will be looking for clues on whether the central bank considers the current policy rate sufficiently accommodative or whether developments in inflation and growth could justify another monetary policy adjustment at upcoming meetings.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.01% | 0.13% | -0.89% | -0.12% | -0.29% | 0.97% | 0.22% | |
| EUR | -0.01% | 0.10% | -0.90% | -0.13% | -0.30% | 0.95% | 0.20% | |
| GBP | -0.13% | -0.10% | -1.01% | -0.25% | -0.42% | 0.81% | 0.09% | |
| JPY | 0.89% | 0.90% | 1.01% | 0.77% | 0.59% | 1.82% | 1.10% | |
| CAD | 0.12% | 0.13% | 0.25% | -0.77% | -0.18% | 1.05% | 0.33% | |
| AUD | 0.29% | 0.30% | 0.42% | -0.59% | 0.18% | 1.23% | 0.53% | |
| NZD | -0.97% | -0.95% | -0.81% | -1.82% | -1.05% | -1.23% | -0.71% | |
| CHF | -0.22% | -0.20% | -0.09% | -1.10% | -0.33% | -0.53% | 0.71% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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