Investing.com - The U.S. dollar jumped to four-year highs against the Canadian dollar on Wednesday after the Bank of Canada left interest rates on hold and said the downside risks to inflation had grown.
USD/CAD hit 1.1047, the highest since September 2009 and was last up 0.71% to 1.1045.
The pair was likely to find support at 1.0952, the session low and resistance at 1.1125.
The BoC maintained the target for the overnight rate at 1%, in a widely anticipated decision.
The central bank said inflation in Canada has fallen further below the 2% target. The bank expects inflation to remain well below target for some time, and consequently the downside risks to inflation have grown in importance.
The bank said that the path of the next rate move would depend on economic data.
Canadian economic growth improved in the second half of 2013, the bank said, while stronger demand from the U.S. and the recent depreciation of the Canadian dollar was expected to help bolster exports going into this year.
The loonie, as the Canadian dollar is also known, was trading close to four year lows against the euro. EUR/CAD hit 1.4983 and was last up 0.79% to 1.4980.
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