FX.co ★ Canadian Dollar at Over 6-Month High

The Canadian dollar rose to C$1.38 against the USD, marking its strongest position since October. This appreciation followed the release of the Bank of Canada's recent minutes, which indicated a significant shift from its previous dovish stance. Although the governing council considered an additional rate cut during its meeting on April 16, it ultimately decided to maintain the policy rate at 2.75%. This decision was driven by ongoing core inflation rates between 2.8% and 2.9%, alongside a robust labor market with unemployment remaining at a historic low of 2.2% in March. The minutes underscored the importance of caution, voicing concerns that further rate cuts could undermine efforts to control inflation, thereby lowering expectations for imminent monetary easing. Furthermore, supporting the Canadian dollar’s strength, preliminary data revealed a 0.2% growth in Canada’s economy in Q1, which helped it steer clear of a technical recession. This performance stood in stark contrast to the U.S. economy, where output decreased by 0.3% and the ADP payrolls plummeted to just 62,000 in April.