BoC is eyeing CAD strength - Rabobank

Sandeep Kanihama FXStreet Contributor

Analysts at Rabobank note that the Bank of Canada is eyeing CAD strength as since May, the Canadian dollar has been on an appreciating trend, from near-1.38/USD before the summer to under 1.22 in early September.

Key Quotes

“BoC Governor Lane explained that the earlier decision to hike rates was made in the context of strong exports and investments. He added however that they will continue to monitor the impact of higher BoC rates. CAD strength resulting from the BoC’s recent hikes could have significant impact on export demand. Lane therefore warned that “as the Canadian dollar is strengthening, we’re certainly wathing that closely and we’ll be taking that into account pretty strongly in making our decisions”.The market has cut its expectations for another hike in October from around 53% to approximately 41%.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD faces next resistance near 1.1930

EUR/USD continues to build on its recovery in the latter part of Wednesday’s session, with upside momentum accelerating as the pair retargets the key 1.1900 barrier amid a further loss of traction in the US Dollar. Attention now shifts squarely to the US data docket, with labour market figures and the always influential CPI releases due on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.