The Canadian dollar rallied Wednesday, snapping a record losing streak, as the nation’s central bank kept interest rates unchanged in the face of sinking oil prices. The loonie rose from the cheapest level since 2003 as the Bank of Canada held its benchmark at 0.5 per cent, pointing to stronger U.S. demand, a weaker currency and last year’s rate cuts as indications the economy was working its way out of an oil slump.

Before the decision to hold rates steady, traders had assigned better than a 50 per cent chance of a reduction. Canadian two-year notes fell as the central bank held pat, pushing yields up from record lows and trimming the advantage of holding similar-maturity Treasuries to the least in a month.

Growth Forecast Cut

The central bank cut its 2016 growth forecast to 1.4 percent from an October prediction of 2 percent on falling investment and a move higher in business inventories. Some analysts believe that Canada’s economic prospects have worsened since October and that it could take until the end of 2017 to fully recover.

Others believe that although the shift toward non-energy production is taking longer than expected it is already happening.

According to policy makers led by Governor Stephen Poloz, “The protracted process of reorientation towards non-resource activity is underway, helped by stronger U.S. demand, the lower Canadian dollar, and accommodative monetary and financial conditions.”

Canada’s currency reversed declines after the decision, trading 0.4 percent higher at C$1.4505 per U.S. dollar at 10:03 a.m. in Toronto, on course to snap a record 14-day losing streak.