The Bank of Canada isn’t convinced by the recent improvements seen in Canada and remains quite cautious. USD/CAD, which was flirting with parity, is on the rise again.
The pair is currently at 1.0075, significantly higher than around 1.0020 before the release. The trough of the day was below parity, at 0.9991.
The BOC rate statement doesn’t include any hints of rate hikes. Recent Canadian job figures were great, and so were other economic indicators. Some had expected for a rate cut. Those expectations were dismissed well before the recent decision, and expectations for a future rate hike emerged.
The high level of uncertainty in the markets, especially due to the situation in Europe, put the BOC on a “wait and see” mode, like many other central banks.
Earlier, Canadian retail sales continued rising. Retail sales rose by 0.4% as expected, while core retail sales exceeded expectations and rose by 0.5%, more than 0.4% predicted. Last month’s numbers were revised to the upside.
1.0080 serves as resistance. Support is now at parity. For more lines and evens, see the Canadian dollar forecast.
In the meantime in the US, the Case Shiller HPI dropped by 3.8%, a bit lower than 3.6% that was expected.
The mood in Europe aids the the US dollar, and this also pushing USD/CAD higher.Get the 5 most predictable currency pairs