Forexpros - The U.S. dollar rose against its Canadian counterpart on Wednesday after the Bank of Canada left interest rates unchanged, surprising many investors expecting tightening to come sooner.
In U.S. trading on Wednesday, USD/CAD hit 0.9991, up 0.72%, up from a low of 0.9904 and off a high of 1.0005.
The pair sought to test support at 0.9832, the low of Jan. 15, and resistance at 1.0057, the high from Nov. 16.
The Bank of Canada kept interest rates unchanged at 1.0% in a widely expected decision, though the monetary authority's comments left investors predicting that tightening would come later than expected.
Canada's economy slowed more than expected in the second half of 2012, and going forward "economic activity is expected to be more restrained."
"The economy is now forecast to return to full capacity in the second half of 2014," the bank said in a statement.
Investors who were expecting tightening to come sooner, perhaps in the first half of this year, ditched the Canadian currency and sought refuge in the U.S. greenback.
Meanwhile in the U.S., uncertainty still remains over how lawmakers will come to agreement to lift the government's USD16.4 trillion debt ceiling, which boosted the safe-harbor greenback's appeal.
Republican leaders in the House of Representatives have said they intend to pass legislation that will give the government room to borrow for another three to four months, though fears political brinkmanship will return when time comes to address longer-term spending reforms kept investors moving towards safe-haven greenback positions on Wednesday.
Markets roiled in 2011 when the U.S. last approached its debt ceiling, as lawmakers waited until the last minutes to strike a deal to avoid default.
The Canadian dollar, meanwhile, was down against the euro and down against the yen, with EUR/CAD up 0.62% and trading at 1.3299 and CAD/JPY down 0.78% at 88.72.
On Thursday, Canada is to produce official data on retail sales, a government measure of consumer spending that accounts for the majority of overall economic activity.
The U.S. is to publish private sector data on existing home sales, a leading indicator of economic health.
In U.S. trading on Wednesday, USD/CAD hit 0.9991, up 0.72%, up from a low of 0.9904 and off a high of 1.0005.
The pair sought to test support at 0.9832, the low of Jan. 15, and resistance at 1.0057, the high from Nov. 16.
The Bank of Canada kept interest rates unchanged at 1.0% in a widely expected decision, though the monetary authority's comments left investors predicting that tightening would come later than expected.
Canada's economy slowed more than expected in the second half of 2012, and going forward "economic activity is expected to be more restrained."
"The economy is now forecast to return to full capacity in the second half of 2014," the bank said in a statement.
Investors who were expecting tightening to come sooner, perhaps in the first half of this year, ditched the Canadian currency and sought refuge in the U.S. greenback.
Meanwhile in the U.S., uncertainty still remains over how lawmakers will come to agreement to lift the government's USD16.4 trillion debt ceiling, which boosted the safe-harbor greenback's appeal.
Republican leaders in the House of Representatives have said they intend to pass legislation that will give the government room to borrow for another three to four months, though fears political brinkmanship will return when time comes to address longer-term spending reforms kept investors moving towards safe-haven greenback positions on Wednesday.
Markets roiled in 2011 when the U.S. last approached its debt ceiling, as lawmakers waited until the last minutes to strike a deal to avoid default.
The Canadian dollar, meanwhile, was down against the euro and down against the yen, with EUR/CAD up 0.62% and trading at 1.3299 and CAD/JPY down 0.78% at 88.72.
On Thursday, Canada is to produce official data on retail sales, a government measure of consumer spending that accounts for the majority of overall economic activity.
The U.S. is to publish private sector data on existing home sales, a leading indicator of economic health.