USD/CAD upside pressure eases ahead of BoC
- CAD, NZD, AUD post strong again versus USD amid risk appetite.
- USD/CAD back below key level.
- Key events ahead: Bank of Canada meeting and US ADP employment report.
USD/CAD pulled back on Tuesday from multi-month highs amid risk appetite and a retreat of the US dollar. The pair reached 24 hours ago 1.2999 and on Tuesday dropped to 1.2862, the lowest since last Friday.
The upside pressure eased ahead of the BoC meeting and amid a weak US dollar. CAD, AUD and NZD were the best performers on the back of risk appetite following headlines from Korea and also amid a rally in crude oil and gold.
The Loonie is still the worst performer among majors so far during 2018, affected lately by NAFTA fears and US President Trump announcement on tariffs.
USD/CAD technical bias points to the upside but it pulled back below the key 1.2900/20 resistance. If it holds below a bearish correction will remain on the cards while if it rises back on top, the greenback could gain more strength for another test of 1.3000.
Key events ahead
The Bank of Canada meets on Wednesday and is expected to keep rates unchanged. The central bank rose rates by 25bp in January. There won’t be a press conference after the meeting. If BoC keeps rates unchanged as expected, the statement is likely to define the impact on the Canadian dollar.
In the US the key data will be the ADP employment report ahead of NFP on Friday. Also on Friday, Canadian jobs data will be released.