By CountingPips.com
The Bank of Canada held its interest rate at 0.25 percent today and restated plans to hold the rate at the current level through June 2010. Today’s rate hold was expected by market forecasts as the BOC has held its rate at an all-time low since a reduction of 25 basis points on April 21st. The BOC 
has lowered the interest rate by 425 basis points since December 2007 to its present level. The BOC said that the interest rate will likely stay at 0.25 percent until the end of the second quarter of 2010 depending on the outlook for inflation as the BOC targets 2 percent inflation.
The BOC statement commented on the Canadian economic situation saying, “The dynamics of the recovery in Canada remain broadly consistent with the Bank’s medium-term outlook in its April Monetary Policy Report (MPR). Stimulative monetary and fiscal policies, improved financial conditions, firmer commodity prices, and a rebound in business and consumer confidence are spurring domestic demand growth.”
Tha Bank growth estimates now see a 2.3 percent GDP contraction in 2009 with growth restarting in 2010 on a pace of 3.0 percent and GDP growth of 3.5 percent in 2011. The BOC also said that the rise in the Canadian dollar “is significantly moderating the pace of overall growth.”
The next BOC rate decision is scheduled for September 10th.
Canadian dollar mixed in forex trading.
The Canadian dollar has been mixed today in the currency markets after the interest rate decision. The Canadian dollar, also known as the “loonie”, has gained ground versus the Australian dollar, New Zealand dollar, British pound while losing ground to the US dollar and Japanese yen. The loonie is virtually unchanged today versus the euro.
The U.S. dollar has gained versus the loonie from today’s opening exchange rate of 1.1079 to trading at 1.1113 this afternoon in the US trading session at 1:11pm ET according to currency data from Oanda.
The loonie has lost ground against the Japanese yen as the CAD/JPY has declined from 84.76 yen per loonie to trading at approximately 84.25. The British pound has fallen against the Canadian currency as the GBP/CAD has dipped to trading at 1.8207 after opening the day at 1.8294.
The Australian dollar has lost ground to the loonie and the AUD/CAD has fallen from 0.9008 to trading at 0.8995 today while the New Zealand dollar has also declined. The NZD/CAD has fallen from 0.7253 to trading later at 0.7226.
USD/CAD Chart – The US Dollar making gains today verses the Canadian Dollar in the forex market (30-Min. Chart).
