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  • US Dollar Index continues to erase last week’s gains.
  • FOMC will announce its policy decisions and BoC Governor Poloz will deliver a speech.
  • Manufacturing PMI data from Canada and the U.S. will be featured in the ecocal.

After losing more than 60 pips and falling to a fresh weekly low on Wednesday, the USD/CAD pair has gone into a consolidation phase ahead of the key data releases and macro events later in the NA trading hours. As of writing, the pair was virtually unchanged on a daily basis at 1.3390.

Despite the disappointing April GDP growth figure from Canada yesterday, the loonie gathered strength against its rivals after Bank of Canada Governor Poloz sounded optimistic by saying that he was expecting an acceleration in the economic growth in the second half of the day and added that the bank’s downward revision to the neutral rate forecast could be temporary.

On the other hand, the ongoing USD-selloff helped the pair push lower since the start of the week as investors are adjusting their positions ahead of today’s critical FOMC meeting. The US Dollar Index, which closed the last three trading days in the negative territory, was last down 0.17% on the day at 97.35.

Previewing the FOMC meeting,  “The biggest dovish risk for the statement would be if “patient” was replaced by language suggesting that “the Committee stands ready to adjust policy as necessary” to support the expansion. We see a modestly low probability of this change, but we cannot rule it out,” said TD Securities analysts.

  • FOMC Preview: What 14 major banks are expecting from today’s meeting?

Later in the session, the IHS Markit will release its final Manufacturing PMI reports for the U.S. and Canada. Moreover,  Bank of Canada Governor Poloz will be delivering a speech in NA evening.

Technical levels to watch