Canada's central bank held its key interest rate at a record low 0.25 percent on Tuesday, but said the need is passing for
record-low rates. The Bank of Canada said it is withdrawing its conditional commitment to keep the rate steady until July. The bank said the need for such extraordinary policy is now passing and it is appropriate to begin to lessen the degree of monetary stimulus. That sets the stage for a rate hike on June 1 when the central bank next meets.

"There's a very high probability that they could raise rates on June 1. I would put the odds of them doing it on June 1 at 75 percent," financial economist Craig Alexander said. "It is the most likely scenario." Canada could become the first Group of Seven country to raise rates since the financial crisis. Unlike the U.S., Canada has not experienced the failure of any major financial institution. There has been no crippling mortgage meltdown or banking crisis in Canada, where there is greater oversight of mortgages.

The central bank said that the economy is growing somewhat more rapidly than it expected.  The Canadian dollar jumped 1.36 cents to 99.90 US cents shortly after the Bank of Canada signalled it will raise rates soon.