The Bank of Canada left its overnight rate at 1.0 percent as expected but said that economic conditions had not improved as fast as hoped.
The central bank last changed its benchmark interest rate in September 2010 when it added 25 basis points to bring it to the current level.
The accompanying statement stated that the key factors enabling a complete economic recovery were not in place and that there was still considerable slack in the economy. "Uncertain global economic conditions appear to be delaying the anticipated rotation of demand in Canada towards exports and investment", the bank said.
The 10:00 am release engendered a brief spate of volatility with the price of Dollar/Canada flitting from a high of 1.0518 at 9:59 am to 1.0489 at 10:02 am and then down to the day's low so far of 1.0476 just before noon.
The improvement in the Canadian Dollar against its American counterpart has most to do with transitory U.S Dollar slippage today and comes in the context of a steadily weakening Canadian currency. In the last twelve months the Northern Dollar has lost 9 percent of its U.S. Dollar value as Chinese economic growth has waned and concerns have escalated about the direction of the world's second largest economy, a major destination for Canadian exports.
Chief Market Strategist