“¢ BoC maintains status-quo and leaves interest rates unchanged.
“¢ The ongoing slump in Oil prices continues to weigh on Loonie.
“¢ The USD remains supported by the global flight to safety.
The USD/CAD pair maintained its strong bid tone through the early North-American trading session and surged to fresh multi-month tops post-BoC announcement.
The Canadian Dollar remained on the defensive after the Bank of Canada (BoC) decided to leave benchmark interest rates unchanged at 1.75% when it concluded its May policy meeting on Wednesday. The decision was in line with market expectations but the ongoing slump in Crude Oil prices kept exerting some downward pressure on the commodity-linked currency – Loonie.
On the other hand, the US Dollar continued benefitting from the global flight to safety amid lingering fears over a full-blown trade war between the world’s two largest economies, especially after media reports suggested that China is preparing to use rare earths to strike back at the US.
Adding to this, possibilities of some short-term trading stops being triggered on a sustained move beyond the 1.3520 region seems to have further collaborated towards accelerate the positive move. Hence, a bullish extension, towards testing the 1.3565-70 supply zone, now looks a distinct possibility.
Technical levels to watch
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