By Will Peters

The Canadian dollar (CAD) is sold heavily following a decidedly bearish sounding Canadian central bank rate announcement that will see interest rates remain unchanged. The outlook for the Canadian dollar remains poor.

Latest: "Investors are selling Canadian dollars aggressively this morning on the back of the Bank of Canada's monetary policy announcement. While the central bank left interest rates unchanged at 1%, their growing concern about low inflation and desire to see their currency weaker has sent USD/CAD to a fresh 4 year high above 1.10." - Kathy Lien at BK Asset Management.

Run up to BoC Decision:

The only notable move in the CAD comes against the British pound which has powered higher on a surprisingly strong unemployment data release.

Markets are betting that the Bank of England will have to raise interest rates much sooner than intended - a pro-GBP scenario as rate yields are forced higher.

Some analysts are now forecasting a rise by early 2015.

A look at the forex markets shows:

The pound sterling to Canadian dollar exchange rate (GBP/CAD) is 0.5% higher than seen at last night's close at 1.8168.The euro to Canadian dollar exchange rate (EUR/CAD) is 0.03 pct higher at 1.4879.The US dollar to Canadian dollar rate (USD/CAD) is 0.08 pct lower at 1.0960.Be Aware: Our CAD quotes are taken from the wholesale inter-bank markets. Your bank will seek to affix a spread when passing on a retail rate. However, an independent FX provider will guarantee to undercut your banks offer, thereby delivering more currency. Please learn more here.

Outlook for the Canadian dollar remains poor

The outlook in the pound sterling vs Canadian dollar exchange rate favours the GBP overwhelmingly. An uptrend that has been in place since May 2013 looks to now be accelerating. At the very best, those looking for a stronger CAD rates vs the GBP can only hope for a easing back in the acceleration and a short-term corrective pullback to this climb.

The outlook for the Canadian dollar against the US dollar favours the USD. However, future direction here depends on the outcome of today's BoC event.

What to expect from the Bank of Canada

BMO Capital analyst Stephen Gallo tells us what he is expecting from the BoC today:

"We anticipate a ‘dovish’ outcome today, with the BoC stopping short of formally adopting any sort of easing bias.

"Under the base case, we expect a knee-jerk reaction higher in USDCAD. This would be before some fairly sizeable profit-taking sets in.

"Along these lines, rates and FX will probably conclude that the chances of some type of easing are a little bit higher today than they were a few months ago, but not high enough to swing the very front-end of the OIS curve into aggressive action.

"We see the top-end of the range in USDCAD under the base case at 1.100-1.105, and the bottom end of the range at 1.080-1.085. An ‘easing’ or ‘contingent easing’ bias today will probably bring 1.105-1.110 into view.

"Under this scenario, we’d raise the bottom-end of our expected range for the remainder of the week from 1.080-1.085 to 1.090-1.092."