By mid-afternoon in New York, USD/CAD had risen 0.22% to 1.0465, after earlier touching its highest point since the beginning of September.
The weakness in the Canadian dollar came after Stephen Poloz, the governor of the BOC, spoke before the House of Commons Standing Committee on Finance in Ottawa.
The BOC trimmed its economic forecasts last week and dropped its tightening bias, which had been in place for over a year. Mr Poloz reiterated this more pessimistic view of the Canadian economy, saying that uncertain global and domestic economic conditions are delaying a recovery in in exports and business investment, which means economic activity has been lower than expected.
He also said that Canadian inflation has remained low in recent months, because of ‘significant slack in the economy’ and acknowledged that this persistent undershooting of the BOC’s inflation target means that downside risks to inflation ‘assume increasing importance’.
For these reasons, Mr Poloz said that ‘substantial monetary policy stimulus currently in place remains appropriate.’
The price of US crude oil futures fell 0.5% to $98.20 a barrel today. Crude oil is Canada’s biggest export.