- Trading volume stays thin amid Good Friday.
- US Dollar Index looks to close the week with gains near 97.30.
- WTI struggles to pull away from the $64 handle.
The USD/CAD pair is moving sideways in a very narrow trading band on Friday as the market action stays subdued amid the Easter Holiday. As of writing, the pair is virtually unchanged on a daily basis at 1.3370.
Earlier this week, disappointing manufacturing sales figures and the dismal tone in the Bank of Canada’s Business Outlook Survey weighed on the loonie. In the second half of the week, upbeat retail sales figures and a slightly higher-than-expected core inflation growth helped the currency show some resilience against the greenback. On the other hand, crude oil remained relatively calm throughout the week with the barrel of West Texas Intermediate struggling to pull away from the $64 handle and failed to provide a directional clue to the commodity-sensitive CAD.
On the other hand, the greenback took advantage of the risk-off flows on Thursday and allowed the US Dollar Index to stage a rebound beyond the 97 mark. The index is now on track to end the week around 0.5% higher.
Next week, the Bank of Canada meeting the primary catalyst for the loonie. Previewing this event, “We look for the Bank of Canada to hold rates unchanged at 1.75%, but we except the MPR to include a 0.2 p.p. downgrade to 2019 GDP growth,” said TD Securities analysts previewing the next BoC meeting,” TD Securities analysts said. “We also look for additional dovish tweaks to the forward-looking language.”
Technical levels to consider