The Canadian dollar firmed against its major counterparts in the New York session on Wednesday, erasing its early losses, after the Bank of Canada left its interest rate unchanged and terminated the quantitative easing program, reflecting the progress in the economic recovery from the crisis.

The BOC maintained its benchmark rate at 0.25 percent, as expected.

The bank has ended the QE program and moved into the reinvestment phase, during which it will purchase Government of Canada bonds to replace maturing bonds.

The bank now expects Canadian economy to grow by 5 percent this year before moderating to 4.25 percent in 2022 and 3.75 percent in 2023.

The Governing Council judged that in view of ongoing excess capacity, the economy continues to require considerable monetary policy support, according to the accompanying statement.

The BOC confirmed that it would hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. The bank estimates that this could happen in the middle quarters of 2022.

The loonie rose to a 6-day high of 1.2300 against the greenback and a 1-1/2-year high of 1.4293 against the euro, off its early near a 2-week low of 1.2432 and more than a 2-week low of 1.4442, respectively. The loonie may challenge resistance around 1.20 against the greenback and 1.40 against the euro.

The loonie appreciated to a 2-day high of 0.9250 against the aussie, from a 1-1/2-month low of 0.9337 seen in the Asian session. On the upside, 0.91 is likely seen as the next resistance level for the currency.

The loonie bounced off from near a 2-week low of 91.25 against the yen, rising to 92.47. The next likely resistance for the loonie is seen around the 94.00 level.

Euro vs CAD (FX:EURCAD)
Forex Chart
From Feb 2024 to Mar 2024 Click Here for more Euro vs CAD Charts.
Euro vs CAD (FX:EURCAD)
Forex Chart
From Mar 2023 to Mar 2024 Click Here for more Euro vs CAD Charts.