Canada's currency strengthened against the U.S. dollar as the Bank of Canada gave a positive view of the economy in its policy update on Wednesday. The central bank left interest rates unchanged -- as expected -- with the key overnight rate at 1.25%. The bank's statement took note of "ongoing uncertainty about trade policies" that weighed on global business sentiment. The update also indicated that global economic activity remained broadly on track. Canadian inflation should soon be on the rise thanks to higher gasoline prices, first-quarter growth was stronger than expected and exports had been more robust than forecast. "Overall, developments since April further reinforce Governing Council's view that higher interest rates will be warranted to keep inflation near target," the BOC said. The next policy update is due July 11. One U.S. dollar last bought C$1.2885 down from C$1.3023 late Tuesday.