FX.co ★ Canadian Dollar Strengthens After BoC Holds Rates

The Canadian dollar firmed slightly to around 1.39 per US dollar after the Bank of Canada, as widely anticipated, left its benchmark interest rate unchanged at 2.25%. The central bank acknowledged that uncertainty remains elevated amid escalating tensions in the Middle East and new US tariff proposals, but reiterated that it stands ready to respond if necessary and will not allow higher energy prices to result in sustained inflation. Markets largely expect the bank to raise rates by 25 basis points in December. Nonetheless, the loonie stayed near its December lows, as the ongoing conflict with Iran continued to bolster demand for the US dollar as a safe-haven asset.