Breaking: BoC leaves policy rate unchanged at 1.75%, USD/CAD jumps to 1.3100

In a widely expected decision, the Bank of Canada on Wednesday announced that it left its policy rate unchanged at 1.75% at its January policy meeting. In its policy statement, the BoC noted that it sees less risk of an extreme downside scenario related to trade tensions.

"Sharp escalations of Middle East tensions could have a significant effect on the economy," the bank said and added that it assumes that this risk will not materialize. "The total impact of trade tensions expected to cut global GDP by 1.2% by the end of 2021, down from 1.3% forecast in October."

With the initial market reaction, the USD/CAD pair jumped to 1.3100, where it was up 0.28% on the day.