The USD/CAD is currently eyeing a technically interesting level: the region around 1.3000.
A break lower could level the path down to 1.2780, which is definitely an option after last week. On Wednesday, comments made from US Fed chairman Powell at his testimonial before the House Financial Services Panel impacted the currency pair, while at the same time the BoC published their latest monetary policy statement.
While Powell said that a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling, and Brexit, there is a risk that weak inflation will be even more persistent than the Fed currently anticipates, which brings back speculations of a 50bp rate cut from the Fed by the end of July. The BoC left interest rates at 1.75% on hold, even though they said that recent Canadian economic strength is not sustainable.
Still, the BoC statement didn't clearly point to lower borrowing costs in the near-term similar to the Fed, which leaves the CAD as a potential strong performer against the USD, especially if inflation data today at 1230pm GMT comes in above 2% (as expected).
In fact, a higher than expected inflation reading is a serious option with WTI having gained more than 15% in June against the mark of 50 USD per barrel.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
A break lower could level the path down to 1.2780, which is definitely an option after last week. On Wednesday, comments made from US Fed chairman Powell at his testimonial before the House Financial Services Panel impacted the currency pair, while at the same time the BoC published their latest monetary policy statement.
While Powell said that a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling, and Brexit, there is a risk that weak inflation will be even more persistent than the Fed currently anticipates, which brings back speculations of a 50bp rate cut from the Fed by the end of July. The BoC left interest rates at 1.75% on hold, even though they said that recent Canadian economic strength is not sustainable.
Still, the BoC statement didn't clearly point to lower borrowing costs in the near-term similar to the Fed, which leaves the CAD as a potential strong performer against the USD, especially if inflation data today at 1230pm GMT comes in above 2% (as expected).
In fact, a higher than expected inflation reading is a serious option with WTI having gained more than 15% in June against the mark of 50 USD per barrel.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.