The Canadian dollar appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the C$ 0.9850 level and was capped around the C$ 0.9930 level. Bank of Canada reduced its overnight target rate by 50bps to 3.50%. BoC reported GDP growth and inflation growth have been consistent with expectations but warned the U.S. economy is likely to experience a deeper and more prolonged slowdown than had been projected in January…The Bank now judges that the balance of risks around its January projection for inflation has clearly shifted to the downside, and, as a result, the Bank is lowering the target for the overnight rate. Further monetary stimulus is likely to be required in the near term to keep aggregate supply and demand in balance and to achieve the 2 per cent inflation target over the medium term. The central bank will update its economic forecasts for economic growth and inflation in its Monetary Policy Report on 24 April 2008. U.S. dollar offers are cited around the C$ 0.9960 level.