Bank of Canada raises interest rates for first time in seven years

The Bank of Canada on Wednesday raised their headline interest rate for the first time in seven years, though it had been widely expected.

The central bank raised interest rates to 0.75% from 0.5%, the first hike since 2010.

Despite being firmly forecast, the move lifted the Canadian dollar to an eleven-month high against the dollar of 1.2812.

Given the recent decline in crude prices, a key driver of sentiment towards the country and its currency, coupled with depressed inflation levels, analysts admitted the decision may seem strange to some.

"However, this has been facilitated by a set of hawkish BoC statements leading into a month which saw exports at a record high of $48.7 billion, and a big overshoot in employment data," said analyst Joshua Mahony at IG.