Canada holds interest rate unchanged at 3.00%. Canadian dollar gains in currency trading. | CountingPips Forex Blog

September 3, 2008 - Forex Economic News

Canada holds interest rate unchanged at 3.00%. Canadian dollar gains in currency trading.

The Bank of Canada announced its decision to keep its interest rate unchanged at 3.00 percent today. The decision to keep the interest rate steady was widely expected by economic and market forecasts. The Bank of Canada has kept the interest rate unchanged Canadian dollar gains in Currency Trading today. since reducing the rate by 50 basis points in each of April and March. The bank has reduced its interest rate by 150 basis points since December of 2007.

The Bank of Canada statement accompanying the rate decision commented on the state of the Canadian economy, "In Canada, domestic demand has slowed modestly but remains strong. It continues to be supported by financial conditions that remain significantly better than those in most other major economies and by income gains stemming from past improvements in the terms of trade. Overall, the level of economic activity is slightly lower than expected in July but still close to the economy's production capacity." The statement gave no signal whether more interest rate cuts might be in the offing despite a slower than expected GDP growth rate in this year's second quarter at 0.3 percent verses forecasts of 0.6 percent.

Loonie gains in Currency Trading.

The Canadian dollar has gained today in the currency markets after the interest rate news. The U.S. dollar declined against its Canadian currency counterpart in trading today from the day's open at 1.0701 CAD per USD to trading at 1.0617 in the afternoon of the U.S. trading session. The European euro has also lost ground to the Canadian "loonie" as the EUR/CAD pair has fallen from the day's open at 1.5512 CAD per EUR to trading at 1.5388. The Canadian dollar also showed gains today verses the Japanese yen to trading at 101.86 yen per loonie and verses the Australian dollar to trading at 0.8867 Canadian dollars per Australian dollar.

USD/CAD Chart - The U.S. dollar declining today against the Canadian dollar after the Bank of Canada left its interest rate unchanged(Hourly Chart).

Forex Chart

tags: bank of canada, interest rate, cash rate, currency trading, cad, usd, aud, eur, jpy

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