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CFD Trading Rate US Dollar vs Canadian Dollar (USDCAD)

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  • 11.03.2024 04:46
    USD/CAD holds steady below 1.3500 amid weaker Oil prices, subdued USD demand
    • USD/CAD struggles to attract any meaningful buyers amid a mixed fundamental cue.
    • Sliding Crude Oil prices and Friday’s mixed Canadian jobs data undermine the Loonie.
    • Bets for a June Fed rate cut keep the USD bulls on the defensive and act as a headwind.

    The USD/CAD pair struggles to capitalize on Friday's goodish rebound from the 1.3420 region, or a nearly one-month low and oscillates in range on the first day of a new week. The pair trades around the 1.3480 area, nearly unchanged for the day during the Asian session, and is influenced by a combination of diverging forces.

    Crude Oil prices drift lower for the second straight day and retreat further from over a four-month peak set earlier this March amid concern about slowing demand in China, exacerbated by underwhelming import data for the first two months of 2024. Furthermore, mixed Chinese inflation data add to market worries and overshadow a tighter supply outlook. This continues to weigh on the black liquid, which is seen undermining the commodity-linked Loonie and acting as a tailwind for the USD/CAD pair.

    The Canadian Dollar (CAD) is further pressured by slowing domestic wage growth in February, to its lowest level since June, and an uptick in the unemployment rate. Meanwhile, the simultaneous release of the US jobs report pointed to a spike in the jobless rate to the highest level in two years reaffirmed bets that the Federal Reserve (Fed) will start cutting interest rates in June. This fails to assist the US Dollar (USD) to build on its recovery from a nearly one-month low and caps the upside for the USD/CAD pair.

    The mixed fundamental backdrop warrants some caution for bullish traders and before positioning for any meaningful appreciating move for the currency pair. Market participants might also prefer to move to the sidelines ahead of the release of the latest US consumer inflation figures on Tuesday, which might influence the Fed's rate-cut path and drive the USD demand in the near term. This, along with Oil price dynamics, should help determine the next leg of a directional move for the USD/CAD pair.

     

  • 08.03.2024 10:36
    USD/CAD Price Analysis: Breaking lower ahead of NFPs
    • USD/CAD has broken below a major trendline and is unfolding lower. 
    • Key fundamental data lies ahead with US Nonfarm Payrolls and Canadian Payrolls both coming out at the same time. 
    • Unless the fundamental data is substantially bullish for the US Dollar, the downmove will probably extend.

    The USD/CAD is down over a tenth of a percent on Friday as traders await the arrival of key employment metrics from both the US and Canada at 13:30 GMT. 

    Over the last two and a half days the pair has fallen from 1.3600 to the 1.3430s as traders digested Federal Reserve (Fed) Chairman Jerome Powell’s dovish comments to US lawmakers. Powell said “we’re not far” from inflation falling to a level where it would be right to start cutting rates. Lower rates are negative for a currency as they tend to reduce foreign capital inflows.

    The mood music around the Bank of Canada (BoC) meanwhile has been much less dovish after the Boc delivered a hawkish hold at its last policy meeting on Wednesday. 

    The technical picture is showing some interesting developments as we head into what will probably be a volatile afternoon. 

    USD/CAD is overall looking bearish. It has broken through a key trendline for the 2024 rally and the break coincides with a sell signal from the Moving Average Convergence/ Divergence (MACD) indicator as it crosses below its signal line (circled). The Relative Strength Index (RSI) is also relatively low – a bearish sign. 

    US Dollar vs Canadian Dollar: Daily chart

    It is possible to see the 2024 price action as forming a Wedge pattern – another potentially bearish motif. Since the trendline has a dual role as the bottom of the Wedge, the trendline break also indicates a breakout from the price pattern. 

    The target for the breakdown is equal to the widest part of the Wedge pattern extrapolated lower from the breakout point lower. This gives a target at roughly 1.3350, which is also the level of the January lows. 

    A break below that would solidify the reversal and probably see a run down to around the vicinity of the 2023 December lows in the 1.3170s.

     

  • 08.03.2024 09:49
    USD/CAD: Loonie to shrug off employment data barring a big surprise in either direction – ING

    Canada releases jobs figures for February today. Economists at ING analyze Loonie’s outlook ahead of the employment report.

    Loonie still looks at the US more than Canada

    Expectations are for a respectable 20K employment print, with the unemployment rate expected to nudge higher from 5.7% to 5.8%.

    The implications for the Canadian Dollar should not be material unless we see a big surprise in either direction. Both the Loonie and Bank of Canada rate expectations have followed very closely US data dynamics and we think that today’s US payrolls should have a bigger say in the short-term direction of USD/CAD. 

    A USD decline should see the Loonie lag other high-beta/commodity currencies, but can still put gradual pressure on USD/CAD, which we expect to break below 1.3000 by 2H24.

     

  • 08.03.2024 04:11
    USD/CAD drops to near 1.3450, awaits labor data from US, Canada
    • USD/CAD continues its losing streak on higher Crude oil prices.
    • Canada’s Unemployment Rate is anticipated to reach 5.8% from 5.7 prior.
    • US Nonfarm Payrolls could print a 200K figure for new jobs created in February, against 353K prior.

    USD/CAD extends its losses for the third consecutive session on Friday, trading lower to near 1.3450 during the Asian hours. Market participants look forward to the labor data from Statistics Canada on Friday. February’s Unemployment Rate is expected to increase by 5.8% against 5.7 prior. Net Change in Employment is anticipated to print 20K against the previous figure of 37.3K.

    The higher Crude oil prices contribute to underpinning the Canadian Dollar (CAD) and, consequently, act as a headwind for the USD/CAD pair. West Texas Intermediate (WTI) inches higher to near $78.90, at the time of writing.

    Economists at ING have highlighted the persistent correlation between the Canadian dollar (CAD) and US data, as well as the strong connection between policy expectations of the Federal Reserve (Fed) and the Bank of Canada (BoC). Consequently, they suggest that significant movements in either direction for the USD/CAD pair appear unlikely at this time.

    US Dollar Index (DXY) attempts to snap its losing streak ahead of the employment figures from the United States (US), hovering around 102 80, by the press time. US Initial Jobless Claims printed 217K reading for the previous week, surpassing the expectations of 215K. Meanwhile, US Nonfarm Productivity remained consistent, maintaining growth at 3.2% in the fourth quarter of 2023, against the market expectations of 3.1%. Friday is set to release employment numbers from the United States (US), which includes Average Hourly Earnings and Nonfarm Payrolls.

    Federal Reserve (Fed) is expected to initiate an interest rate cut cycle starting from June. Fed Chair Jerome Powell reiterated the central bank's stance during his second day of testimony before the US Congress, further fueling speculation regarding potential rate cuts. Powell suggested that cuts in borrowing costs could occur sometime this year, with the condition that the inflation trajectory aligns with the Fed's 2% target.

     

  • 07.03.2024 14:34
    USD/CAD to stay rangebound in the short term before a USD decline emerges – ING

    USD/CAD has declined below the 1.3500 level. Economists at ING anlayze the pair’s outlook.

    USD/CAD to head towards the 1.3000 mark in the second half of 2024

    The persistence of CAD’s correlation to US data and the strict link between Fed and BoC policy expectations means the room for a major break in either direction in USD/CAD does not seem very likely. 

    We expect it to keep trading in a 1.3400/1.3600 range in the coming weeks before a clearer USD downtrend starts to emerge from the second quarter onwards and takes the pair towards the 1.3000 mark in the second half of 2024.

     

  • 07.03.2024 11:03
    USD/CAD Price Analysis: Threatening to break below key trendline
    • Negative comments from Chairman Powell have weakened the US Dollar. 
    • USD/CAD is selling-off to a key trendline and is threatening to break below it.
    • The MACD indicator, useful in a range bound market, is issuing a sell signal. 

    The USD/CAD is down a tenth of a percent on Thursday in line with widespread US Dollar (USD) weakness, as traders digest Federal Reserve (Fed) Chairman Jerome Powell’s comments to US lawmakers on the Wednesday, during the first day of his testimony to Congress. 

    The Greenback sold-off steeply on Wednesday after Powell affirmed that the Fed was planning to cut interest rates subject to inflation falling closer to target. USD/CAD was particularly hit as the Fed’s stance contrasts with the hawkish hold adopted by the Bank of Canada (BoC) at its last meeting. 

    The technical picture on the daily chart of USD/CAD is showing some interesting developments in line with the fundamentals. 

    US Dollar vs Canadian Dollar: Daily chart

    The chart above shows how the pair has been in a long sideways market since the end of 2022. 

    The Moving Average Convergence/ Divergence (MACD) momentum indicator is especially useful to analyze range bound asset prices, as it tends to accurately mirror and predict the key turning points of prices oscillating in a range. This can be seen to be the case in the chart above. 

    More recently USD/CAD has been rising up in the range since the turn at the end of 2023. Although it has not yet reached the range highs, the MACD has just crossed below the signal line, giving a sell signal and suggesting the trend may be about to change. The steep sell-off on Wednesday adds credence to the idea the market may be reversing. 

    US Dollar vs Canadian Dollar: Daily chart

    Price has fallen to the level of a key trendline for the 2024 rally. This is likely to be an important make-or-break support zone for the pair. The strength of the preceding day’s sell-off adds evidence to the possibility price could penetrate the trendline and begin moving south. 

    A decisive break below the trendline – characterized by a long red candle that closes well below the trendline and near its low of the day, for example – would be the confirmation signal of a reversal of the 2024 uptrend and a probable new phase of weakness, targeting the range lows in lower 1.30s. If the pair prints three down days in a row and also breaks below the trendline that would be another confirmation of a “decisive break”. 

    US Dollar vs Canadian Dollar: Daily chart

    The possible evolution of a bearish Wedge price pattern in the move higher, as shown on the chart above, is another potentially negative motif. Such a pattern recommends a breakdown to a target equal to its widest point, extrapolated from the breakout point lower. This gives a target of roughly 1.3350. 

    In the event that the trendline manages to hold, however, the pair may continue its slow upside grind, targeting the top of the wedge at roughly 1.3640 initially, and on a breakout higher, the top of the long-term range at 1.3900. 

     

  • 07.03.2024 09:02
    USD/CAD: Upside potential for the Loonie in the coming months – Commerzbank

    The Loonie benefited significantly from Wednesday's BoC decision with USD/CAD nosediving a full figure lower to 1.3500. Economists at Commerzbank analyze the pair’s outlook.

    Fairly hawkish decision

    The BoC left its key interest rate unchanged at 5%. At the same time, the BoC continued to emphasize that it is too early to talk about rate cuts. The statement also kept the reference to ongoing risks for the inflation outlook. Overall, this was a fairly hawkish decision. 

    Some market participants were expecting a more dovish tone in the statement. The fact that the BoC did not deliver reinforces our view that the BoC is unlikely to cut rates until after the Fed. We therefore continue to see upside potential for the CAD in the coming months.

     

  • 07.03.2024 04:40
    USD/CAD flirts with weekly low, around 1.3500 mark amid modest USD weakness
    • USD/CAD attracts some intraday sellers on Thursday amid a weaker US Dollar.
    • The BoC’s hawkish pause underpins the CAD and contributes to the downtick.
    • Rebounding US bond yields and a softer risk tone to limit further USD losses.

    The USD/CAD pair struggles to capitalize on the Asian session uptick on Thursday and languishes near the 1.3500 psychological mark, just above a one-week low touched the previous day.

    Mixed signals on the Federal Reserve's (Fed) rate-cut path fail to assist the US Dollar (USD) to register any meaningful recovery from its lowest level since early February, which, in turn, is seen acting as a headwind for the USD/CAD pair. Fed Chair Jerome Powell told US lawmakers on Wednesday that the central bank will cut interest rates this year, though wants to see more evidence that inflation is falling to the 2% target. Minneapolis Fed President Neel Kashkari, however, downplayed speculations about more aggressive policy easing and said that he may reduce the number of cuts this year, possibly to only one in the wake of the incoming stronger US macro data.

    The Canadian Dollar (CAD), on the other hand, continues to draw support from a hawkish hold from the Bank of Canada (BoC) on Wednesday. Meanwhile, subdued Crude Oil prices do little to provide any meaningful impetus to the commodity-linked Loonie. Furthermore, the yield on the benchmark 10-year US government bond rebounds from a one-month low touched on Wednesday, which, along with a generally softer tone around the equity markets, acts as a tailwind for the safe-haven buck. This, in turn, should help limit any meaningful downside for the USD/CAD pair and warrants some caution before positioning for any further depreciating move.

    Moving ahead, investors now look to Fed Chair Powell's second day of testimony before the Senate Banking Committee. Apart from this, traders will take cues from Thursday's economic docket – featuring the US Weekly Initial Jobless Claims, and Trade Balance figures from the US and Canada. This, along with the US bond yields and the broader risk sentiment, will influence the USD demand and provide some impetus to the USD/CAD pair.

     

  • 06.03.2024 12:36
    USD/CAD: Short-term bull trend remains intact – Scotiabank

    USD/CAD continues to struggle to surpass the 1.3600 level. Economists at Scotiabank analyze the pair’s outlook.

    Key support remains at 1.3540

    The USD/CAD pair continues to run into firm resistance around the 1.3600 area but losses intraday so far are limited and the short-term USD bull trend remains intact.

    Trend momentum oscillators are bullishly aligned for the USD on the intraday and daily DMI studies. 

    Key support remains at 1.3540, with a push below this point targeting a drop to the 1.3475/1.3480 area.

     

  • 06.03.2024 10:08
    USD/CAD likely to continue range-trading around the 1.3500 handle – Rabobank

    The 1.3500 magnet theory continues to dominate USD/CAD forecast and trading views, economists at Rabobank say.

    Fading any move down towards 1.3300 and any move up towards 1.3700

    USD/CAD is still the lowest volatility free-floating USD cross and we see little reason for that to change in the coming month, with the pair likely to continue range-trading around the 1.3500 handle. 

    We favor fading any move down towards 1.3300 and any move up towards 1.3700.

     

  • 06.03.2024 09:13
    USD/CAD: Downside risks for Loonie as the BoC may introduce some reference to monetary easing – ING

    The Bank of Canada (BoC) announces monetary policy today, without releasing new economic projections. Economists at ING analyze USD/CAD outlook ahead of the meeting.

    Cautious about a rebound in CAD in the near term

    There is a risk on the downside for CAD as the BoC may introduce some reference to monetary easing today, but the overall message should remain cautious. 

    The rebound in Fed rate expectations has spilled into the CAD curve, which now prices in 90 bps of easing this year. There is probably little incentive for the BoC to drive rate expectations lower at this stage, and they may be happy to make this an in-between meeting without much market impact.

    We remain cautious about a rebound in CAD in the near term, although a broad-based Dollar decline from the second quarter should take USD/CAD to the 1.3000 handle by year-end.

     

  • 06.03.2024 07:25
    BoC Preview: Three scenarios and their implications for USD/CAD – TDS

    Economists at TD Securities discuss the Bank of Canada (BoC) Interest Rate Decision and its implications for the USD/CAD pair.

    Base Case: Mildly Hawkish (65%)

    Bank leaves overnight rate at 5.00% as it waits for more progress on underlying inflation. Statement repeats that higher rates continue to restrain demand despite stronger Q4 GDP, inflation pressures still too broad. No substantive change to guidance. USD/CAD -0.10%.

    Slightly Dovish: (30%)

    Bank leaves overnight rate at 5.00% as it monitors progress. Statement notes that higher rates continue to restrain demand as economy moves further into excess capacity. Last paragraph softens language around inflation risks but rest of guidance unchanged as BoC repeats desire for further/sustained easing. USD/CAD +0.25%.

    Extremely Dovish (5%)

    Bank leaves overnight rate at 5.00% but opens door to near-term cuts with guidance shift. Statement notes that soft growth has added to excess supply and that price pressures have softened considerably since January meeting. Guidance removes reference to inflation risks and softens language around GC wanting to see further progress. USD/CAD +0.60%.

  • 06.03.2024 05:40
    USD/CAD Price Analysis: Remains capped below 1.3500, eyes on BoC rate decision
    • USD/CAD loses ground near 1.3583 ahead of the BoC rate decision. 
    • The pair maintains a bullish outlook unchanged as the pair is above the key EMA; RSI stands in bullish territory.
    • The immediate resistance level will emerge at 1.3600; 1.3570 acts as an initial support level for the pair.

    The USD/CAD pair remains capped under the 1.3500 barrier during the early European session on Wednesday. Market players await the Bank of Canada (BoC) interest rate decision and press conference later in the day. The Canadian central bank is widely expected to hold its key interest rate at 5.0% at its March meeting, and financial markets anticipate the first rate cut to come in around June. USD/CAD currently trades near 1.3583, down 0.08% on the day. 

    According to the four-hour chart, USD/CAD keeps the bullish vibe unchanged as the pair is above 100-period Exponential Moving Averages (EMA). Additionally, the Relative Strength Index (RSI) stands in bullish territory above the 50.0 midlines, supporting the buyer for the time being. 

    On the bright side, the immediate resistance level for USD/CAD will emerge near a high of February 6 and a psychological mark at 1.3600. The next hurdle is seen near a high of December 12 at 1.3618, en route to a high of November 27 at 1.3711. 

    On the flip side, the confluence of the lower limit of the Bollinger Band and the 100-period EMA at 1.3570 acts as an initial support level for the pair. A bearish break below the latter will see a drop to a low of March 4 at 1.3545, followed by a low of February 26 at 1.3500. 

    USD/CAD four-hour chart

     

     

     

  • 06.03.2024 01:18
    USD/CAD extends its upside above 1.3600 ahead of BoC rate decision
    • USD/CAD extends the rally to 1.3600 amid the rebound of USD. 
    • BoC is expected to keep rates steady at 5% for the fifth time in a row. 
    • The US ISM Services PMI came in at 52.6 in February vs. 53.4 prior, weaker than the expectation of 53.0.

     The USD/CAD pair edges higher to nearly 1.3600 during the early Asian trading hours on Wednesday. The Bank of Canada (BoC) will announce the interest rate decision later in the day, with no rate change expected. The pair currently trades near 1.3598, adding 0.03% on the day. 

    The BoC will release its Monetary Policy Statement on Wednesday, and markets expect the Canadian central bank to keep rates steady at 5% for the fifth time in a row. Financial markets see just a 19% odds of a surprise rate cut on Wednesday at its March Italee policy meeting. Traders will take core cues from the press conference about the economic and inflation outlook.

    On the USD’s front, Federal Reserve (Fed) Chair Powell’s testimony to the Senate Banking Committee on Wednesday will be a closely watched event. The dovish tone from Fed officials might exert some selling pressure on the Greenback and create a headwind for the USD/CAD pair. 

    About the data, the US February ISM Services PMI declined to 52.6 from 53.4 in January, below the market consensus of 53.0. The New Orders Index improved to 56.1 from 55.0 in the previous reading. The Employment Index dropped to 48.0 versus 50.5 prior, and the Prices Paid Index declined to 58.6 from 64.0 in the previous reading. 

    Moving on, traders will watch the BoC interest rate decision and the Fed Chair Powell’s testimony on Wednesday. The attention will shift to US labor market data on Friday. The US Nonfarm Payrolls is estimated to add 200,000 jobs in February, while the Unemployment Rate is forecast unchanged at 3.7%.

     

  • 05.03.2024 15:22
    USD/CAD seen at 1.3000 by year-end – MUFG

    The Canadian Dollar (CAD) weakened in February and was the third worst performing G10 currency. Economists at MUFG Bank analyze Loonie’s outlook.

    CAD near-term downside risks before recovery

    Declining inflation and weaker consumer spending in Canada should allow for the BoC to commence cutting rates by June. This could possibly coincide with a decision from the BoC to end its QT program. The labour market remains robust however and wage growth remains the concern that could delay a decision to cut rates and/or end QT. 

    Still, while the timing of starting monetary easing may differ slightly from the US, we see the extent of easing in 2H 2024 being similar which could see CAD strength versus the Dollar being less than for other G10 currency gains versus the Dollar.

    USD/CAD – Q1 2024 1.3500 Q2 2024 1.3400 Q3 2024 1.3300 Q4 2024 1.3000

    CAD/JPY – Q1 2024 108.89 Q2 2024 108.21 Q3 2024 107.58 Q4 2024 107.69

    EUR/CAD – Q1 2024 1.4580 Q2 2024 1.4740 Q3 2024 1.4780 Q4 2024 1.4820

     

  • 05.03.2024 13:37
    USD/CAD hovers near 1.3600 ahead of BoC interest rate decision, Fed Powell’s testimony
    • USD/CAD rises to three-month high around 1.3600 amid a dismal market mood.
    • The US Dollar rebounds as Fed Powell is expected to deliver hawkish guidance on interest rates.
    • Investors expected that the BoC will keep interest rates unchanged at 5% for straight fifth time.

    The USD/CAD pair trades close to three-month high near 1.3600 in the late European session on Tuesday. The Loonie asset holds strength as the market mood is cautious ahead of Federal Reserve Chair Jerome Powell’s testimony before Congress on Wednesday and a packed United States economic calendar this week.

    S&P 500 futures exhibit significant losses in the early American session, indicating a decline in the risk appetite of the market participants. The US Dollar is slightly bullish after closing in negative territory in the last two trading sessions. The US Dollar Index (DXY) is up 0.08%, around 103.90 ahead of the Fed Powell’s testimony.

    Fed Powell is expected to maintain hawkish rhetoric amid less conviction over inflation returning to the 2% target. Powell may reiterate that there is no need of urgency for rate cuts.

    But before that, investors will focus on the Institute of Supply Management (ISM) Services PMI for February, which will be published at 15:00 GMT. According to economists, the Services PMI representing the service sector, which accounts for two-third of the US economy is expected to drop to 53.0 from 53.4 in January.

    Meanwhile, the Canadian Dollar will be guided by the interest rate decision from the Bank of Canada (BoC), which will be announced on Wednesday. The BoC is expected to hold interest rates at 5% for the fifth time in a row. Market participants will focus on the guidance about when the BoC will start reducing interest rates.

     

  • 05.03.2024 13:16
    USD/CAD: A push to new short-term highs will renew underlying strength – Scotiabank

    USD/CAD moves back to the 1.3600 area. Economists at Scotiabank analyze the pair’s outlook.

    Support remains 1.3540/1.3550

    Spot gains back to the 1.3600 area are putting a little more pressure on last week’s highs and the reversal (‘evening star’ pattern) highlighted on Monday. 

    A push to new short-term highs negates the reversal formation and will renew the underlying strength in the USD for a push on to the mid/upper 1.3600s. 

    Support remains 1.3540/1.3550.

    See – USD/CAD: Loonie to weaken further before a turnaround in H2 – CIBC

  • 05.03.2024 12:05
    USD/CAD: Loonie to weaken further before a turnaround in H2 – CIBC

    The Loonie has not moved much in the last month, with USD/CAD bouncing around 1.3500. Economists at CIBC Capital Markets analyze the pair’s outlook.

    USD/CAD to reach 1.2900 by the end of 2025

    We don’t expect the BoC to pivot further towards setting the stage for rate cuts until its April MPR, at which point the Loonie is likely to weaken further, with USD/CAD set to peak at 1.3700 in Q2. 

    Once the Fed is on the policy normalization path starting in Q3, broad USD weakness should help give the CAD a lift, with higher commodity prices in 2025 also boosting the currency. 

    We continue to see USD/CAD reaching 1.2900 by the end of 2025.

     

  • 05.03.2024 06:47
    USD/CAD Price Analysis: Tests psychological barrier of 1.3600 ahead of ISM Services PMI
    • USD/CAD could test the psychological resistance at 1.3600 on Monday.
    • Technical analysis suggests a confirmation of the bullish trend for the pair.
    • The key support area appears around the nine-day EMA at 1.3552 and the major support of 1.3550.

    USD/CAD extends its winning streak for the second session on Tuesday amid a stable US Dollar (USD), which could be attributed to the risk aversion ahead of the key economic data from the United States (US). The USD/CAD pair inches higher to near 1.3590 during the Asian trading hours.

    The technical analysis of the 14-day Relative Strength Index (RSI) is positioned above 50, suggesting bullish momentum for the USD/CAD pair to surpass the psychological resistance of 1.3600 following the major barrier of 1.3650.

    Furthermore, the lagging indicator, Moving Average Convergence Divergence (MACD), indicates a confirmation of a bullish trend for the USD/CAD pair. This interpretation is based on the MACD line's position above the centerline and the signal line.

    On the downside, the USD/CAD pair could find the key support region around the nine-day Exponential Moving Average (EMA) at 1.3552 aligned with the major support level of 1.3550. A break below this zone could prompt the pair to navigate the further support region around the 23.6% Fibonacci retracement level at 1.3505, in conjunction with the psychological level of 1.3500.

    USD/CAD: Daily Chart

     

  • 05.03.2024 00:33
    USD/CAD holds below the 1.3600 barrier, eyes on BoC rate decision
    • USD/CAD remains flat around 1.3575 in Tuesday’s early Asian session. 
    • Fed’s Bostic said there’s no urgency to cut interest rates given the US economy's strength. 
    • The BoC is expected to hold rates at 5% at its June meeting on Wednesday.

    The USD/CAD pair holds below the 1.3600 barrier during the early Asian trading hours on Tuesday. The Bank of Canada (BoC) will announce the interest rate decision on Wednesday, with no change in rate expected. Meanwhile, the decline in oil prices weighs on the Loonie and provides some support to the USD/CAD pair. At press time, the pair is trading at 1.3575, unchanged for the day. 

    The Federal Reserve (Fed) is expected to maintain the benchmark interest rate in the 5.25% to 5.5% range at its March meeting. The financial market has priced in the first rate cuts in June, but this might change if inflation stalls or wages continue to beat forecasts. Fed President Raphael Bostic said on Monday that the central bank is under no urgent pressure to cut interest rates given a prospering economy and job market. 

    On the other hand, the Bank of Canada (BoC) is widely expected to hold its key interest rate at 5.0% on Wednesday. Investors have priced an 80% odd that the first rate cut to come in around June. The press conference might offer some hints about the timing of rate cuts. Dovish remarks from the BoC governor could exert some selling pressure on the Canadian Dollar (CAD). 

    Market players will focus on the US ISM Services PMI, which is estimated to ease from 53.4 in January to 53.0 in February. Later this week, Fed Chairman Jerome Powell’s Senate testimony will be a closely watched event ahead of the US Nonfarm Payrolls (NFP) on Friday. 

     

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