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  • USD/CAD gained traction on Wednesday and rose above 1.3550.
  • Falling crude oil prices on OPEC headline weigh on loonie.
  • Bank of Canada is expected to keep its policy rate unchanged at 0.25%.

The USD/CAD pair stayed relatively quiet near 1.3500 during the Asian trading hours before gaining traction in the last hour. As of writing, the pair was up 0.3% on the day at 1.3557.

Falling crude oil prices seem to be causing the commodity-related loonie to weaken against its major rivals. Pressured by a Bloomberg report suggesting that the OPEC+ meeting was in doubt over disputes on oil-quote cheating, the barrel of West Texas Intermediate (WTI) fell sharply on Wednesday. Ahead of the weekly EIA Crude Oil Stocks Change data, the WTI was trading near $36, losing more than 2% on the day.

Focus shifts to US data, BoC meeting

On the other hand, the US Dollar Index erased the majority of its daily losses and provided an additional boost to USD/CAD. Ahead of the ADP’s private sector employment report and the ISM’s Non-Manufacturing PMI data, the index is down 0.08% on the day at 97.60.

Later in the day, the Bank of Canada, under the leadership of new Governor Tiff Macklem will announce its interest rate decision and publish the monetary policy statement.

BoC: Six major banks expectations for the Interest Rate Decision.

Previewing this event, “the statement should maintain a cautious tone, even if acknowledging that conditions are evolving in line with the Bank’s less pessimistic scenario from April, while the forward-looking portion should repeat that the Bank stands ready to adjust its programs if necessary,” said TD Securities analysts.

Technical levels to watch for