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.
.
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
Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.