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USD/CAD Rate Trades in Defined Range Ahead BoC Interest Rate Decision
THIS WEEK IN THE FOREX MARKETS
CANADIAN DOLLAR TALKING POINTS
USD/CAD trades in a narrow range following the limited reaction to Canada’s Employment report, and the exchange rate may continue to consolidate ahead of the Bank of Canada (BoC) interest rate decision on September 9 as the Relative Strength Index (RSI) bounces back from oversold territory.
USD/CAD appears to have reversed course ahead of the January low (1.2957) as Canada’s Employment report shows a slowdown in job growth, with the economy adding 245.8K jobs in August versus forecasts for a 250.0K print, which compares to the 418.5K expansion the month prior.
It remains to be seen if the fresh data prints will sway the Bank of Canada (BoC) as the rise in full-time position (205.8K) starts to outpace improvement in part-time employment (40.0K), and the central bank may merely attempt to buy time in September after delivering the updated Monetary Policy Report (MPR) in July.
In doing so, the BoC may show little intentions of altering the path for monetary policy as the “Bank expects the economy’s recuperation to slow,” and the central bank may continue to carry out “its large-scale asset purchase program at a pace of at least $5 billion per week” as Governor Tiff Macklem pledges to support the Canadian economy throughout the recovery. Read more...
