USD/CAD hits session highs after BoC holds rates

The U.S. dollar rose to session highs against the Canadian dollar on Wednesday after the Bank of Canada kept interest rates on hold and said the future direction of monetary policy would continue to be data dependent.

USD/CAD was up 0.19% to 1.1000 from 1.0979 ahead of the central bank announcement.

The pair was likely to find support at 1.0958, the session low and resistance at 1.1070, the high of April 1.

The BoC left rates on hold at 1.00% and said that underlying inflation is expected to remain below target for some time.

The timing and direction of the next change to the policy rate will depend on how economic data influences the risks associated with household imbalances, the bank’s rate statement said.

The BoC kept its forecast for economic growth unchanged at around 2.5% in 2014 and 2015 before easing to around 2% in 2016 and said that the global economic expansion is expected to strengthen over the next three years.

In the U.S., data on Wednesday showed that industrial production rose 0.7% in March, ahead of expectations for a 0.5% increase.

A separate report showed that U.S. housing starts rose less than expected in March, while building permits fell, pointing to underlying weakness in the housing sector.

Elsewhere, the loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD up 0.20% to 1.5195.

Market watchers were looking ahead to a speech on monetary policy by Fed Chair Janet Yellen in New York later in the trading day.