- Early downtick led by Powell’s dovish comments turned out to be short-lived.
- The BoC decides to maintain status-quo at the end of the July policy meeting.
- Absent hawkish tilt prompts aggressive short-covering move in the last hour.
The USD/CAD pair reversed an early dip to 1.3070 region and spiked to two-week tops following to the latest monetary policy update by the BoC.
After consolidating in a narrow range through the early part of Wednesday’s trading session, the pair came under some intense selling pressure in reaction to the Fed Chair Jerome Powell’s dovish sounding remarks in the prepared statement to the Congress.
The downtick, however, turned out to be short-lived and the pair witnessed a dramatic turnaround, rallying around 60-70 pips after the BoC, in its latest monetary policy update this Wednesday, decided to leave interest rates unchanged at 1.75%.
It would now be interesting to see if the pair is able to capitalize on the momentum or meets with some fresh supply at higher levels as the focus now shifts to the post-meeting BoC press conference and the release of June FOMC meeting minutes.
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