USD/CAD PRICE OUTLOOK: CANADIAN DOLLAR CLIMBS IN RESPONSE TO BANK OF CANADA INTEREST RATE DECISIONUSD/CAD value motion probes ses
USD/CAD PRICE OUTLOOK: CANADIAN DOLLAR CLIMBS IN RESPONSE TO BANK OF CANADA INTEREST RATE DECISION
- USD/CAD value motion probes session lows in quick response to the most recent BoC choice
- Financial institution of Canada leaves its benchmark rate of interest at 0.25% and QE unchanged as anticipated
- Canadian Greenback power seems prone to proceed largely owing to broad US Greenback weak point
The Canadian Greenback is buying and selling round intraday highs as USD/CAD value motion slides in response to the most recent BoC rate of interest choice. Financial institution of Canada officers agreed to depart the goal in a single day charge unchanged at 0.25% and reiterated the present tempo of asset purchases at $4-billion per week. The Financial institution of Canada famous in its press assertion how the central financial institution plans to proceed its QE program till the financial restoration is underway, which remains to be stated to want ‘extraordinary assist.’ Nonetheless, the BoC identified how financial momentum headed into the fourth quarter seems to be higher than initially anticipated in October.
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USD/CAD PRICE CHART: 15-MINUTE TIME FRAME (08 DEC TO 09 DEC 2020)
This will have helped drive USD/CAD value motion right down to recent intraday lows, however the transfer seems comparatively muted total with the Canadian Greenback stronger by 32-pips in opposition to the Dollar and little modified within the wake of the BoC choice. That stated, the 1.2775-level stands out as a possible technical assist zone aligning with week-to-date lows. The response by the Canadian Greenback comes broadly anticipated seeing that the final BoC assembly recalibrated its quantitative easing program in a shift additional down the curve, and little change was anticipated out of the central financial institution immediately.
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The Financial institution of Canada additionally has famous how CAD value motion has strengthened not too long ago with crude oil rising to its highest stage since early March. I’ve beforehand famous the potential for a stronger Canadian Greenback on the again of climbing oil costs. Additional, a strong Canadian jobs report launched final Friday might encourage a barely firmer stance by the BoC. Maybe a extra vital driver of latest USD/CAD promoting strain, nevertheless, could possibly be broad-based US Greenback weak point serving to gasoline Loonie power.
| Change in | Longs | Shorts | OI |
| Each day | 1% | -7% | -1% |
| Weekly | 9% | -7% | 4% |
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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