Canadian Dollar Jumps to 27-month Highs Versus Dollar After BOC Hikes Rate

The Canadian dollar rose sharply against its American counterpart on Wednesday after the Bank of Canada unexpectedly raised interest rates by 25 basis points.

The pair USDCAD fell to as low as 1.21300 right after the rate hike report, which is the lowest level since mid-June 2015 before retreating a little bit. The pair lost 1.24% to trade at 1.22210 in morning trading session on Wednesday. The Bank of Canada raised its interest rate to 1% from 0.75% after its monetary policy meeting, marking its second rate hike this year after the first increase in July.

The central bank said that Canadian economy is becoming more broad-based and self-sustaining given supportive economic data, such as its second quarter GDP which was reported to beat expectations and narrowed trade deficit.

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