• Bank of Canada keeps rates unchanged as expected.
• Loonie rose modestly after the announcement.
• USD/CAD moving toward daily lows, under 1.3450.

The USD/CAD weakened after the decision of the Bank of Canada (BoC) and is moving toward daily lows, trading under 1.3440.

The BoC announced on Wednesday that it left the key interest rate unchanged at 4.5% following the April policy meeting, as expected. BoC Governor Tiff Macklem will be delivering his comments on the policy outlook and respond to questions at a press conference starting at 1500 GMT.

The loonie rose modestly across the board after the decision, but it is still lagging among G10 currencies. The worst performer is the US Dollar which tumbled after the US Consumer Price Index (CPI) and amid an improvement in market sentiment.

The USD/CAD is moving with a bearish bias and is about to test the daily low at 1.3430. Below attention would turn to the 1.3400 zone (April low). While under 1.3500, the short-term outlook is biased to the downside.

Technical levels