Great news for homebuyers as interest rates stay low
The currency slipped 0.4 of a cent to a fresh, eight-month low of 96.88 cents US as the bank said that "the considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required."
In its last announcement in late January, the bank had also hinted that rate hikes were some way off, saying at that time that "the timing of any such withdrawal (of monetary policy stimulus) is less imminent than previously anticipated."
The dollar has fallen about 3.3 cents against the U.S. dollar since the Bank of Canada's January announcement.
Since then, economic data has shown falling retail sales at the end of 2012, a contraction of economic growth in December and low inflationary pressures.
Traders also looked ahead to the Canadian February employment report coming out Friday. Economists looked for job creation around 7,500.
Meanwhile, there was positive employment data two days before the release of the U.S. government's employment report for February.
Payroll firm ADP said the private sector created 198,000 jobs last month. The data came out two days ahead of the U.S. government's employment report for February. Economists had been expecting that report to show the economy created about 155,000 jobs.
BMO revised its expectations to 180,000 in the wake of the report.