There was no hawkish response from the Bank of Canada yesterday. Instead of being hawkish, the bank has suspended rate hikes.

Ahead of the Bank of Canada's decision on April 12, analysts suggest a 27% rate hike, but that figure is down from previous levels.

USD/CAD rose 54 pips to 1.3807, with the rest of the FX market largely flat, so the move is entirely CAD driven.

At the same time, the U.S. dollar jumped higher yesterday after Fed Chairman Jerome Powell's speech in favor of a higher interest rate. This movement gave a boost to the USD/CAD pair, and when it broke through the December high, the upward momentum continued.

What we are seeing is a divergence in rates between the U.S. and Canada.

If there is a big jump in this pair, it should be because of the economic divergence, with the U.S. dollar staying stronger and Canada stumbling because of the interest rate halt. This is certainly possible because of high household debt in Canada and variable mortgage rates. Presumably, this will change in the second half of the year and potentially cause the Bank of Canada to cut rates.

Bank of Canada Senior Deputy Governor Carolyn Rogers will give a speech today at 18:40 UTC and will likely try to iron out any misunderstandings in the BOC statement. For now, the focus will be on data.