USD/CAD – Canadian dollar steady ahead of BoC rate decision

USD/CAD has ticked higher in the Wednesday session. Currently, the pair is trading at 1.3506, up 0.09% on the day. On the release front, the Bank of Canada sets the benchmark rate and will release a rate statement. In the U.S., the sole event is the Richmond Manufacturing Index, which is projected to climb to 6 points. On Thursday, the U.S. releases Preliminary GDP and unemployment claims.

All eyes are on the Bank of Canada, with rate-setters expected to take a pass and maintain rates at 1.75%, where they have been pegged since October. With this in mind, investors will be looking for clues about future moves from the rate statement. Will policymakers sound positive about the economy? The labor market created a record number of jobs in April (106 thousand), and consumer spending has been solid. At the same time, trade tensions between the U.S. and China have soared, which has hurt risk appetite towards minor currencies like the Canadian dollar. As well, oil prices have fallen, which has weighed on the Canadian currency. USD/CAD has been fairly subdued in recent weeks, and the tone of rate statement, whether optimistic or dovish, could cause some volatility in the pair.

The U.S. economy continues to perform well, and first-quarter economic growth is expected to remain above the 3% level. Preliminary GDP will be released on Thursday and is expected to post a healthy gain of 3.1%. In April, the initial release came in at 3.2%, easily beating the estimate of 2.2%. If the revised reading also beats expectations, traders can expect the greenback to move higher.

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USD/CAD Fundamentals

Wednesday (May 29)

  • 10:00 BoC Rate Statement
  • 10:00 BoC Overnight Rate. Estimate 1.75%
  • 10:00 US Richmond Manufacturing Index. Estimate 6

Thursday (May 30)

  • 8:30 US Preliminary GDP. Estimate 3.1%
  • 8:30 US Unemployment Claims. Estimate 216K
  • 8:30 Canadian Current Account

*All release times are DST

*Key events are in bold

USD/CAD for Wednesday, May 29, 2019

USD/CAD, May 29 at 8:05 DST

Open: 1.3494 High: 1.3522 Low: 1.3482 Close: 1.3506

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3290 1.3383 1.3445 1.3552 1.3662 1.3771

USD/CAD showed little movement in the Asian session and has posted small gains in European trade

  • 1.3445 is providing support
  • 1.3552 is the next resistance line
  • Current range: 1.3445 to 1.3552

Further levels in both directions:

  • Below: 1.3445, 1.3383, 1.3290 and 1.3200
  • Above: 1.3552, 1.3662 and 1.3771

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.