Canadian Dollar Advances After BoC Holds Rate At 1.00%

10:36, 22nd October 2014

(RTTNews) - The Canadian dollar climbed against its major counterparts on Wednesday, trimming its early losses, following the Bank of Canada's decision to maintain interest rates at 1.00 percent, as expected.

The Bank Rate will remain at 1.25 percent and the deposit rate at 0.75 percent, it noted.

Although the outlook remains for stronger momentum in the global economy in 2015 and 2016, the profile is weaker than in July and growth prospects are diverging across regions, the bank said in accompanying statement.

The loonie fell in early deals after data showed that Canadian retail sales fell by 0.3 percent in August to C$42.4 billion. This second consecutive monthly decrease follows gains in the six previous months.

The loonie hit an 8-day high of 1.1189 against the greenback and a 6-day high of 95.76 against the yen, reversing from early lows of 1.1291 and 94.94, respectively. The next possible resistance for the loonie lies around 1.11 against the greenback and 96.5 against the yen.

The loonie climbed back to a 9-day high of 1.4172 against the euro, off early low of 1.4302. If the loonie continues its uptrend, it may challenge resistance around the 1.40 area.

The loonie reversed from an early low of 0.9918 against the aussie with pair trading at 0.9855. Further uptrend may help the loonie to pierce its early 8-day high of 0.9815.