The Canadian dollar is picking up pace vs. its neighbour today, sending USD/CAD to fresh lows in the mid-1.3000s.
USD/CAD weaker on BoC decision
The pair met extra selling pressure after the Bank of Canada left its key rate unchanged at 0.50% at today’s meeting, broadly in line with prior surveys.
The central bank, however, revised lower its forecasts for this year’s economic growth to 1.1% (from 1.3%) and for 2017 to 2.0% (from 2.2%). The BoC now expects the output gap to close around mid-2018, ‘materially later than expected’.
Regarding inflation, the central bank said core consumer prices remain close to the 2% target.
CAD is also deriving support from the buoyant tone in crude oil prices, with the barrel of West Texas Intermediate up near 2% to levels above the $51.00 mark ahead of the weekly report on crude inventories by the DoE.
USD/CAD significant levels
As of writing the pair is retreating 0.54% at 1.3049 and a breach of 1.3026 (100-day sma) would open the door to 1.2996 (low Sep.22) and then 1.2926 (5-month support line). On the flip side, the next hurdle aligns at 1.3172 (200-day sma) followed by 1.3314 (high Oct.7) and finally 1.3575 (50% Fibo of the 2016 drop).