Home Forex USD/CAD traders are watching the BoC and the oil price for guidance

USD/CAD traders are watching the BoC and the oil price for guidance

by SuperiorInvest
  • USD/CAD stays offered at the beginning of the week.
  • Eyes on BoC and oil prices hitting resistance.

USD/CAD is bid open on Monday ahead of a busy schedule for the next two weeks which will include red news on American calendar, the Bank of Canada interest rate decision and then the Federal Reserve interest rate decision the following week. We’ll also have the usual start of the month employment data for North America to wrap things up.

The Canadian dollar offsetting losses earlier in the week and flourished in risk setups while the US supplies rallied amid dovish sentiment on the Federal Reserve. The CAD strengthened in anticipation of hawkish forward guidance from the Bank of Canada meeting this week. For the week, the currency is up 0.1%, its fifth consecutive week of gains, the longest such sequence since May 2021.

”We expect the BoC to hike by 25bp and raise the overnight rate to 4.50% at its January meeting. We expect this to be the last BoC hike in this cycle, although forward guidance is likely to leave open the possibility of further tightening,” analysts at TD Securities said. ”We would put the odds of the BoC not moving at one in three. We expect the bank to continue quantitative tightening.”

Canada is a major commodity producer, p oil the main correlation that came to a close on Friday. Speculators began to add back positions in black gold as willingness to take risks has risen sharply and expectations of Chinese demand are once again coming to the fore. ”Investors started to add length and cover the recent short position,” TD Securities analysts explained.

“Indeed, many market participants now expect strong demand growth in 2023 as China’s reopening drives growth, while key monetary policy moments are also on the radar in the Western world,” the analysts added.

However, WTI is under pressure at the start of the week, which could spell a hurdle for CAD bulls for the day ahead.

Source Link

Related Posts

%d bloggers like this: