Canada’s dollar achieves limited gains post BoC’s policy decision

The Canadian dollar is experiencing limited gains on Wednesday, but is still struggling to recover lost ground after the Bank of Canada held its benchmark interest rate at 5%, in line with market expectations.

The Canadian dollar is seeing a step up against most major currency blocs but remains down against the Antipodeans and flat against the Swiss Franc. The BoC held rates steady for the third straight meeting in a row, leaving enough hawkish wiggle room to warn that further rate hikes would follow if inflation risks increase.

The Canadian central bank has cooled its hawkish rhetoric, paring back statements about inflation risks and keeping the focus on easing price pressures. The BoC statement states that the Governing Council wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behavior.

US ADP Employment Change figures missed the mark on Wednesday, introducing some jitters into USD-based currency pairs. The US ADP Employment Change for November showed 103K new jobs added to the US economy, below the forecasted upswing to 130K and falling back from October’s 106K.

US Initial Jobless Claims for the week of November 24 will be the notable data release on Thursday before markets round the corner into Friday’s US Nonfarm Payrolls (NFP).