Canadian Dollar extended declines
The Canadian Dollar (CAD) fell on Wednesday, pushed lower across the FX market as the Loonie struggles under the weight of a dovish Bank of Canada (BoC) that is still extremely cautious on rate cuts with Canadian inflation not expected to return to the BoC’s 2% target until 2025. Canada saw money markets trim bets of a BoC rate cut in April down to 40%, tumbling from 65% before the BoC’s monetary policy statement on Wednesday morning.
The Bank of Canada followed up their latest policy statement with a press conference, where BoC Governor Tiff Macklem highlighted the BOC’s determination to see inflation come down before adding rate cut discussions to the table. The Canadian Dollar (CAD) is on pace to be the poorest performer of the majors on Wednesday. The CAD is in the red across the board, down close to a full percent against the Japanese Yen (JPY) and the Swiss Franc (CHF). The Loonie saw its most moderate losses against the US Dollar (USD) but still shed around a fifth of a percent against the Greenback for the day.
The USD/CAD rallied back into the 1.3490 neighborhood after an early plunge to 1.3430 on Wednesday. The pair is seeing some technical friction from the 200-hour Simple Moving Average (SMA), but near-term momentum remains tilted toward the bullish side with the early week’s swing low pricing in a technical floor at 1.3420. Continued bullish momentum will send the USD/CAD through a technical congestion zone as the 50-day and 200-day SMAs consolidate near the 1.3500 handle. The pair is on pace to close in the green for a fourth straight week as the USD/CAD grinds back up from December’s bottom bids near 1.3200.
The USD/CAD rallied back into the 1.3490 neighborhood after an early plunge to 1.3430 on Wednesday. The pair is seeing some technical friction from the 200-hour Simple Moving Average (SMA), but near-term momentum remains tilted toward the bullish side with the early week’s swing low pricing in a technical floor at 1.3420. Continued bullish momentum will send the USD/CAD through a technical congestion zone as the 50-day and 200-day SMAs consolidate near the 1.3500 handle. The pair is on pace to close in the green for a fourth straight week as the USD/CAD grinds back up from December’s bottom bids near 1.3200.