The Canadian dollar had one of its strongest days in months on Wednesday, gaining about two cents mainly because of a rebound in oil prices.

The loonie was trading hands at 81.39 cents US in the afternoon, well up from the low of 79.58 it hit in the minutes before the Bank of Canada released its latest interest rate decision, which was to keep its benchmark rate steady where it is, at 0.75 per cent.

About a quarter of analysts polled by Bloomberg before the decision had been expecting a rate cut, which would have sent the loonie lower because it would make Canada less attractive for investors. So when the central bank decided to do nothing, that was perceived as good news from a currency perspective at least.

The main catalyst driving the loonie up, however, was oil. The price of a barrel of the North American oil benchmark known as West Texas Intermediate jumped up more than five per cent to $56.07 US, a high for the year.

Oil was up mainly because of new data out of the U.S. showing that drillers are starting to scale down and stop new drilling because of cratering prices.

The loonie popped despite the underlying bleak tone of the Bank of Canada's statement, which revised its estimate for first quarter growth to effective zero. It's also closer to the 86 cents that the central bank is forecasting to be the loonie's average level this year.