Bank of Canada leaves key rate unchanged
Malcolm Morrison, The Canadian Press
The Canadian dollar gave up early gains and moved lower after the Bank of Canada’s announced it was leaving interest rates unchanged and warned of the negative effects of a rising currency.
The loonie was 0.12 of a cent lower to 102.82 cents US after the central bank announced its decision to keep the key interest rate at one per cent.
The bank observed that the economic recovery in Canada is proceeding slightly faster than expected and that “while consumption growth remains strong, there are signs that household spending is moving more in line with the growth in household incomes.”
But the bank also warned that “the export sector continues to face considerable challenges from the cumulative effects of the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance.”
The currency is riding at a three-year high.