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USD/CAD steady as BoC holds the course on rates

After drifting in the early part of the week, USD/CAD has posted slight losses on Wednesday. Currently, the pair is trading quietly at 1.3576, down 0.28% on the day. On the fundamental front, the Bank of Canada maintained its Overnight Rate at 0.25%, where it has been pegged since March. Canada’s manufacturing sales rebounded after a disastrous April read of -28.5, with a 10.7% gain in May. There was good news south of the border as well. The US Empire State Manufacturing Index bounced back after four straight declines, with a strong reading of 17.2. Industrial Production gained 5.4%, outpacing the forecast of 4.5%. On Thursday, US retail sales are expected to post a gain of 5.0%.

 

Bank of Canada maintains benchmark rate

There were no surprises from the Bank of Canada, which kept interest rates at ultra-low levels. The rate remained at 0.25%, where it has been pegged since March, when the bank slashed rates by a staggering 1.0%, in order to stabilize the economy and financial markets. The bank did sound a somber note, stating that the global and Canadian economic outlooks remain uncertain. The Canadian dollar has reeled off three straight months of gains, but still hasn’t completely recovered from an abysmal March, when USD/CAD jumped 4.9 percent.

 

USD/CAD Fundamentals

*Key events are in bold

USD/CAD Technical

 

In the Asian session, USD/CAD lost ground and this trend continued in European trade. The pair has reversed directions in North American trade, posting small gains

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 [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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