Investing.com - The Bank of Canada kept interest rates on hold on Wednesday, as expected and said that the current monetary policy stance remains appropriate.
The bank held its overnight rate at 0.50%, citing "material excess capacity" in the economy.
The decision to hold rates steady underlines the divergence in monetary policy with the U.S., where the Federal Reserve has indicated that it may hike rates later this month.
“While there have been recent gains in employment, subdued growth in wages and hours worked continue to reflect persistent economic slack in Canada, in contrast to the United States,” the bank said in a statement.
The Canadian dollar was near five-week lows against its broadly stronger U.S. counterpart following the announcement, with USD/CAD up 0.28% at 1.3332 from around 1.3306 earlier.