The Canadian dollar weakened to the day's low but quickly rebounded Wednesday after the Bank of Canada kept the overnight rate unchanged at 1% and signalled a marked shift away from its earlier tightening bias. "It was no surprise and the Canadian dollar is back to trading where we were. The statement was more dovish and consistent with messages a lot of other central banks are putting out," said Don Mikolich, director of foreign exchange sales at CIBC World Markets in Toronto. In its statement, the Bank of Canada said the need to withdraw monetary stimulus has "diminished," citing growth in the U.S and the situation in Europe that could prompt "more severe dislocations" in global financial markets. The move comes in response to stalling global growth, a sharp fall in equities, signs of funding stress in European banks, an increasing real exchange rate and Canada's own gross domestic product, which shrank in the second quarter. Canadian dollar rose against its U.S. counterpart as investors fancied riskier assets and higher yielding currencies, but gains were capped as investors awaited the text surrounding the Canadian central bank's rate decision