USD/CAD on hold ahead of BoC Decision

USD/CAD is showing limited movement on Wednesday. Early in the North American session, USD/CAD is trading at 1.3219, down 0.13%. With no tier-1 data out of Canada or the US on Wednesday, investors will be focused on the Bank of Canada policy meeting (14:00 GMT).

On Tuesday, the US dollar flexed some muscles on Tuesday and hammered its Canadian counterpart. USD/CAD climbed 1.05%, its highest one-day gain since June.

Bank of Canada likely to stay pat

Later on Wednesday, the Bank of Canada releases its monthly policy meeting. The bank slashed interest rates from 0.75% to 0.25% in March, and BoC Governor Tiff Macklem has stated that the bank will maintain these rate levels until at least 2023 and Macklem could repeat this pledge at the policy meeting. The bank has also promised to purchase C$5 billion in government bonds each week and to provide more stimulus if needed. Canada’s economy is showing promising signs of recovery, but with GDP plunging by 38.7% on an annualized basis, it’s no surprise that the BoC policymakers remain in a cautious mood. Bottom line? With the bank unlikely to make any dramatic announcements, today’s meeting could prove to be a sleeper for USD/CAD.

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USD/CAD Technical

  • 1.3288 is the first line of resistance. This is followed by resistance at 1.3338
  • 1.3137 is providing support. Below, there is support at 1.3021 which is protecting the symbolic 1.30 level
  • USD/CAD broke above the 20-day MA on Tuesday, which points to an upward trend for the pair

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Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
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, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.