The Canadian central bank has voted this afternoon to keep interest rates on hold at 0.25% in a move widely expected by markets. The accompanying statement claimed that strength from the Canadian dollar has compromised the rate of recovery in the second half of the year. The Canadian currency has gained over 13% against the US dollar this year, and the central bank is concerned that high exchange rates for the CAD could undermined the rate of recovery.

The Canadian currency has strengthened after the economy showed signs of exiting its worst recession since 1992 and commodity demand from China has been revived. The stronger currency makes Canadian exports less competitive and this was reflected in the first deficit in traded goods since 1976 this year.

Currency rates for the Canadian dollar are currently at USD0.9256 and GBP0.5557

The rates quoted above are interbank rates. Client rates may vary according to the volume and timing of the trade.