The Bank of Canada left the benchmark interest rate unchanged, but its tone in the accompanying statement became more hawkish, pushing USD/CAD down to support.
The statement consists of some optimistic words:
In Canada, the economic expansion is proceeding largely as expected … The possibility of greater momentum in household borrowing and spending in Canada represents an upside risk to inflation … some of the considerable monetary policy stimulus currently in place will be eventually withdrawn …
USD/CAD now trades at 0.9675, down from 0.9720 before the release. Support is at 0.9667. Support currently holds.
Earlier, Canada’s RMPI (Raw Materials Price Index) unexpectedly jumped by 6.8%, much higher than 3.7% that was expected, and following a strong rise of 5.8% last month.
USD/CAD traded at around 0.9720 before the release. The optimism about another temporary fix for Greece’s problems pushed USD/CAD below 0.9750 line earlier in the day. Support is found at 0.9667, followed by 0.96. 0.9750 is now resistance.
For more line and upcoming events, see the Canadian dollar forecast.
Yesterday, GDP came out slightly better than expected, with a rise of 0.3% in March, but Canada’s current account was very disappointing. The pair rose from 0.9750, which was support, and now works as far resistance.