CAD depreciated against other major currencies in the European session on Thursday as investors continued to digest the Bank of Canada’s dovish policy update.
Releasing its policy statements on Wednesday, the BoC announced the decision to maintain its benchmark rate at 4.50%. That coincided with economists’ expectations and marked a pause in the BoC’s interest-rate-raising campaign after eight consecutive hikes, which lifted its policy rate by 425 bps cumulatively.
Also, the Canadian central bank noted that the latest data continue to be in line with its projections that the CPI inflation will decline to around 3% in the middle of the year. This statement was interpreted by markets as a signal the BoC is to stay on hold.