USD/CAD: BoC Governor defended inflation target, stayed neutral on interest rates


USDCAD Movement

For the 24 hours to 23:00 GMT, the USD rose 0.46% against the CAD and closed at 1.2769.

The Bank of Canada (BoC) Governor, Stephen Poloz, defended the use of inflation targets and restated that policymakers would be cautious about future interest rate moves despite signs of a pick-up in wages. He further stated that fundamental factors of supply and demand, as well as short-term factors are continuing to drive growth in consumer prices. Also, the BoC Governor reiterated the central bank’s statement that it was monitoring wage growth and consumer prices, as well as economic capacity to see how the nation’s economy was adjusting to recent rate hikes.

In the Asian session, at GMT0400, the pair is trading at 1.2768, with the USD trading a tad lower from yesterday’s close.

The pair is expected to find support at 1.2712, and a fall through could take it to the next support level of 1.2656. The pair is expected to find its first resistance at 1.2822, and a rise through could take it to the next resistance level of 1.2876.

Investors would now closely monitor Canada’s housing starts data for October, coupled with building permits for September, both due later in the day.

The currency pair is trading between its 20 Hr and 50 Hr moving averages.

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