- BoC maintains status-quo and leaves interest rates unchanged at 1.75%.
- Absent dovish signals/bullish Oil prices provided a strong boost to Loonie.
The USD/CAD pair tumbled to fresh session lows, breaking below the 1.3300 handle, or weekly lows in a knee-jerk reaction to the latest BoC monetary policy update.
Having consolidated in a narrow trading band through the mid-European session, the pair met with some aggressive supply in the last hour after the Bank of Canada (BoC), as was widely expected, left interest rates unchanged at the conclusion of its September policy meeting.
Meanwhile, the fact that the accompanying monetary policy statement had little in terms of indicating a dovish shift by the Canadian central bank, coupled with a strong intraday rally in Crude Oil prices lifted the commodity-linked currency – Loonie and exerted some pressure on the major.
On the other hand, the US Dollar failed to capitalize on a goodish pickup in the US Treasury bond yields and remained on the defensive amid firming speculations that the Fed might ease more aggressively at its upcoming meeting later this month, which did little to stall the pair’s sharp intraday slide.
Adding to this, possibilities of some short-term trading stops being triggered on a sustained break below the 1.3300 round figure mark might have further aggravated the bearish pressure and now sets the stage for an extension of the pair’s retracement slide from 2-1/2 month tops set in the previous session.
Technical levels to watch
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