- The dollar remains firm with the DXY at 95.2750
- The greenback's data has risen Q2 GDP expectations.
- Poloz drops a hawkish tone, yet Loonie falls on uncertainty from his comments.
USD/CAD has popped on Poloz speaking from 1.3310 to 1.3375 the session highs despite a hawkish tone from the BoC's governor. USD/CAD is currently trading at 1.3361, up from the day's low of 1.3276.
USD/CAD has rallied around a cent on the day as the dollar remains firm with the DXY at 95.2750 within the day's range of 94.5260-95.2890. Poloz has said that the BOC has seen signs that markets have become more responsive to data surprise, in other words noting that the market is buying the Loonie on improved economic data performances, expecting the central bank to raise rates.
Poloz comments
BoC's Poloz: Impact of tariffs, B20 lending guidelines to "figure prominently" in July rate decision
We will now wait to see what comes of the presser. Meanwhile, US data today has been solid and has spurred Nomura to raise their Q2 GDP tracker:
"Given the stronger-than-expected net exports in May, we revised up our Q2 GDP tracking estimate by 0.7pp to 4.9% from 4.2%. Incoming information points to an acceleration in growth in Q2. While some of the positive contribution from goods exports could wane in coming quarters as trade disputes intensify and foreign growth slows, domestic demand boosted by expansionary fiscal policy should support economic activity."
USD/CAD levels
Momentum indicators are are picking up in overbought territory and the bullish DMI is firmer. The recent USDCAD rally has tested the last major retracement level (76.4%) of the May-Sept 2017 decline at 1.3384 and a break and daily close above there opens 1.3545 1st June high.
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