USD/CAD clings to strong gains above 1.3300 after BoC event

• USD/CAD pair is up nearly 1% on Wednesday.
• Bank of Canada left its policy rate unchanged at 0.25% as expected.
• BoC Governor Macklem says there is scope to do more with QE.

The USD/CAD pair extended its daily rally during the American trading hours and touched its highest level in three weeks at 1.3334. As of writing, the pair was up 1.02% on a daily basis at 1.3315.

Earlier in the day, the broad-based USD strength and falling crude oil prices provided a strong boost to the pair. Supported by safe-haven flows, the US Dollar Index rose to its highest level in more than a week at 93.65 on Wednesday. Reflecting the risk-averse market environment, Wall Street's main indexes opened deep in the negative territory and the S&P 500 was last seen losing more than 3% on a daily basis.

Meanwhile, the barrel of West Texas Intermediate (WTI) is down nearly 5% on the day at $37 and putting additional weight on the commodity-related CAD's shoulders.

BoC leaves key rate steady at 0.25%

Following its monetary policy meeting, the Bank of Canada (BoC) left its policy rate unchanged at 0.25% as expected. Although the initial market reaction to the BoC's policy statement was largely muted, BoC Governor Tiff Macklem's remarks on the policy outlook didn't allow the CAD to stage a rebound.

Macklem noted that there is scope to do more with the QE program and added that they will do more if needed. "The message to Canadians is that interest rates are going to be low for a long time," Macklem added.

There won't be any high-tier macroeconomic data releases from Canada on Thursday and investors will be keeping a close eye on the preliminary third-quarter Gross Domestic Product (GDP) data from the US.

Technical levels to watch for