Canadian dollar dropped versus the greenback from yesterday’s maximum at 0.9836, the highest level since May 2008, as the Bank of Canada decided yesterday to keep its benchmark interest rate unchanged at 1%.

Economists at National Bank of Canada note that Canada’s central bank was more negative about the possible challenges to the country’s economic growth than expected and has made it clear that rates won’t be raised in the coming months.

Specialists at TD Securities believe that the Bank will have time to assess the impact that the crosscurrent of global forces has on the Canadian economy because of spare capacity and core inflation well below 2%. In their view, the Bank of Canada is under no pressure of emergency to follow the path of monetary tightening. The analysts don’t expect the rate hike until July.

Strategists at HSBC say that Canadian central bank looks satisfied with its policy framework and won’t move forward that will, of course, weight on loonie.

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