The Canadian dollar jumped against its U.S. counterpart on Tuesday morning, after the Bank of Canada raised its interest rate to 1% from 0.75%. This is the BoC’s second rate hike this year – the first having been in July. Analysts prescribed a higher likelihood to an October rates change but highlighted supportive economic data, such as its second quarter GDP which beat expectations last week, as a strong backdrop for a potential hike prior to the announcement. One U.S. dollar bought C$1.2196 following the decision, compared with C$1.2375 late Monday in New York. The yield on Canadian 10-year government bonds jumped 10 basis points to 1.962%.
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