The Canadian dollar jumped against most of its major counterparts after the Bank of Canada left its key overnight interest rate unchanged at 1.0 percent. The central bank gave a good assessment of the current economic situation in Canada.
Meanwhile, building permits rose more than expected to 11.9 percent in October following the previous month’s drop of 4.1 percent. Expectations were for a 2.3 percent increase. The pick in the construction sector broke the trend of a three month consecutive decline.
Recent economic data suggest that growth in the United States has been slightly more robust than anticipated, largely as a result of continued vigour in consumer spending and business investment. However, uncertainty around the global economic outlook has increased sovereign debt crisis in Europe has deepened. Based on these criteria, the Bank of Canada kept the rate unchanged and will monitor future economic developments.
The Canadian dollar strengthened on the rate decision, gaining 0.7 percent against the US dollar. USDCAD fell to 1.0120 from 1.0193. EURCAD fell to 1.3554 from 1.3647.