The Canadian dollar strengthened to 1.36 per USD, a one‑month high, supported by a weaker greenback as markets reassessed the outlook for the Bank of Canada (BoC). The US dollar retreated as the recent rally in energy prices paused, reducing pressure on emerging markets to shift aggressively into the greenback.
Additional support for the loonie came from faster domestic wage growth. At the same time, data showed that Canada’s GDP was flat in March, indicating that elevated energy prices may have curbed overall spending.
The figures were consistent with the BoC’s decision to leave interest rates unchanged this week. The bank noted that inflation remains contained and that higher energy costs have not yet unsettled household inflation expectations, thereby reducing the urgency for a more restrictive policy stance.
