BoC Preview: What to expect of USD/CAD

By FXStreet FXStreet (Edinburgh) – The Bank of Canada will hold its monetary policy meeting later in the NA session. While consensus expects the central bank to keep the monetary stance unchanged and the benchmark rate intact at 0.5%, the centre of attention could surely turn to the Monetary Policy Report (MPR) and the more relevant press conference by Governor S.Poloz, scheduled for later.

Prior estimates see the BoC revising lower its outlook on the domestic economic growth for the last quarter of the current year and the whole of 2016, all justified by the weaker scenario overseas.

Regarding USD/CAD, the BoC have shown its preference for a weak currency as the engine that can boost the exports sector and offset the softness coming from energy prices. The Canadian dollar has been recently supported by CAD-US spreads and the recent pick-up in crude oil prices. However, the pair’s decline appears somewhat limited, as shown by the inability of sellers to break below the key support at 1.28, the USD resurgence and the broader scenario of diverging monetary policies by the Fed and the BoC.

All in all, and banning surprises, USD/CAD should remain well supported in the 1.29/1.28 area, this representing a good opportunity …read more

Source:: FX Street