- USD/CAD rises further above 1.3200, heads for the highest close since October 16.
- Greenback gains momentum across the board after Fed cut rates, signals pause.
The USD/CAD broke higher and climbed to 1.3207, hitting a fresh one-week high following the release of the FOMC statement. The pair was already sharply higher for the day on the back of the Bank of Canada meeting.
The Federal Reserve cut the interest rate to the 1.5%-1.75% range, making the third consecutive cut. The Fed signaled that at the next meeting, it might put monetary policy on hold. Two FOMC members, Kansas City Fed President George, and Boston Fed President Rosengren, preferred to keep interest rates unchanged. As of writing, Chairman Powell is reading a statement and will then answers questions.
The Greenback climbed supported by hints of a pause at the Fed. The DXY printed fresh highs and is testing the weekly top. The momentum favors the upside with the US Dollar also rising against commodity and emerging market currencies.
Earlier today, the Bank of Canada announced it kept interest rates unchanged, but the Loonie weakened as the central bank presented a cautious tone. It mentioned “risks are more tilted to the downside than before,” adding that “the resilience of Canada’s economy will be increasingly tested as trade conflicts and uncertainty persist”.
Levels to watch
The USD/CAD is having the biggest daily gain in a month, making the rebound from 1.3050 even more interesting and now is attempting to hold on top of 1.3190 that could lead to more gains.
On the upside, the next resistance is located at 1.3210 followed by 1.3235 and 1.3275. On the flip side, 1.3180 has become the immediate support followed by 1.3145.
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