Canada keeps rates at 4.5%

The Bank of Canada said on Tuesday that it would hold its target for the overnight rate at 4.5%.

The decision was widely expected because of deteriorating US economic conditions and the Canadian dollar's appreciation.

The central bank confirmed this: "The combined effect of a weaker US outlook and a higher assumed level of the Canadian dollar implies that net exports will exert a more significant drag on the economy in 2008 and 2009 than previously expected."

Revised projections put US econom