USD/CAD rises further above 1.2600 on BoC Governor Poloz comments

  • CAD extends losses following Bank of Canada policy decision. 
  • BoC Post meeting press conference underway. 

The USD/CAD pair rose further and printed a fresh weekly high at 1.2657 during the post-meeting press conference at the Bank of Canada. The Central bank, as was widely expected, kept is its key monetary policy interest rate at 1.25%. 

Following the decision, the Loonie lost ground across the board, then pulled back, but after the beginning of the press conference, weakened further, hitting fresh lows.

As of writing, Governor Stephen Poloz and Deputy Governor Carolyn Wilkins are still holding a press conference and USD/CAD trades near the highs at 1.2630/40. 

Poloz between limited optimism and caution

BoC Governor said that the economy made considerable progress over the last 12 months but warned that is not yet able to remain at full capacity on its own. Also note that the economic moderation continued early 2018 in a way more pronounced than expected. 

Regarding rates, Poloz noted that there are forces like trade uncertainty and geopolitical risks that need to be dissipated for the interest rate to reach the neutral range.

He reaffirmed that the path of monetary policy is intensely data depended. He signaled that the Governing Council debated about the appropriate pace of interest rate hikes. 

The words from the BoC failed to offer support to the Loonie that extended losses across the board. USD/CAD also gained more support from a partial recovery of the US dollar. 

Technical levels 

To the upside, resistance levels might be located at 1.2675, 1.2715 and 1.2730 (Apr 6 low). On the flip side, supports now could be seen at 1.2595/1.2600 (previous daily high), 1.2545 (Apr 18 low) and 1.2525 (Apr 17 low). 

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