The Euro leapt to its highest level in four years against the Canadian Dollar on Wednesday after the Bank of Canada kept interest rates at 1% and as Bank governor Stephen Poloz said that any future changes all depend on the state of the economy.
The Central Bank also held a press conference following the data release. In it the Bank stated that whilst it maintained rates at 1% it expects the Canadian economy to improve and see growth rise to 2.5% in 2014 and in 2015. It added that it expects the Canadian economy to start firing on all cylinders in two years time.
“In Canada, growth improved in the second half of 2013. Stronger US demand as well as the recent depreciation of the Canadian Dollar should help to boost exports and, in turn, business confidence and investment,” the bank said.
The Central Bank has kept its interest rates at 1 %, for more than three years in an attempt to boost the economy. But growth has been so sluggish that inflation is below the central bank’s 2% target. The bank revealed that it expects inflation to reach its target rate in two years.
The single currency is likely to experience volatility tomorrow as Thursday sees the publication of a number of important data reports. Investors will be watching out for the French business confidence, Spanish unemployment rate, and German manufacturing PMI reports.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,,Euro,0.6668 ,
Canadian Dollar,,Pound Sterling,0.5452 ,
Canadian Dollar,,Australian Dollar,1.0214 ,
Euro,,Pound Sterling,0.8180 ,