USD/CAD rises to over one-week tops, BoC in focus
| • A strong follow-through USD buying helps build on this week’s recovery move.
• Weaker oil prices weigh on Loonie and remain supportive of the positive momentum.
• Today’s key focus would remain on the latest BoC monetary policy update.
The USD/CAD pair continued gaining positive traction through the mid-European session and is currently placed at over one-week tops, marginally above mid-1.3100s.
The US Dollar buying interest gathered traction on Wednesday after the Trump administration threatened to impose tariffs on additional $200 billion worth of Chinese imports and was seen as one of the key factors driving the pair higher.
This coupled with a sharp decline in crude oil prices, which tends to undermine demand for the commodity-linked currency - Loonie, provided an additional boost and further collaborated to the pair's ongoing recovery move from near one-month lows set at the beginning of this week.
Moving ahead, today's key focus would be on the latest BoC monetary policy update, where the Canadian central bank is widely expected to raise interest rates by 25bps. Hence, the subsequent press conference would take the spotlight and help investors determine the pair's next leg of directional move.
Technical levels to watch
A follow-through buying interest has the potential to continue lifting the pair towards the 1.3200 handle en-route 1.3225 supply zone. On the flip side, the 1.3140 level now seems to protect the immediate downside, which if broken could accelerate the fall back towards sub-13100 level.
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