21 Jan 2015
USD/CAD 1.2400 just around the corner
FXStreet (Edinburgh) - The Canadian dollar intensifies its depreciation vs. its neighbor on Wednesday, lifting USD/CAD to the vicinity of 1.2400.
USD/CAD catapulted by BoC bearishness
The pair is trading in the upper-1.2300s, levels last seen in April 2009 following the surprising rate cut by the BoC. Recall that the central bank caught markets off guard today, lowering the refi rate 25 bps to 0.75% and consequently triggering a sharp sell off in the CAD, helping spot to reach the vicinity of 1.2400 the figure.
In the meantime, in his press conference, Governor S.Poloz stressed the rate cut is intended to protect the economy against the disinflationary pressures and did not rule out further cuts in case the crude oil prices continue to drop, which he sees as a hampering factor for the recovery. In addition, he argued that the domestic economy remains on sustained growth track and he is ‘encouraged’ by what happened in the US economy.
USD/CAD levels to watch
The pair is now up 2.18% at 1.2369 with the next resistance at 1.2400 and 1.2500 (psychological levels) followed by 1.2715 (high April 2009). On the flip side, a breakdown of 1.2115 (high Jan.20) would aim for 1.2100 and 1.2000 (psychological levels).
USD/CAD catapulted by BoC bearishness
The pair is trading in the upper-1.2300s, levels last seen in April 2009 following the surprising rate cut by the BoC. Recall that the central bank caught markets off guard today, lowering the refi rate 25 bps to 0.75% and consequently triggering a sharp sell off in the CAD, helping spot to reach the vicinity of 1.2400 the figure.
In the meantime, in his press conference, Governor S.Poloz stressed the rate cut is intended to protect the economy against the disinflationary pressures and did not rule out further cuts in case the crude oil prices continue to drop, which he sees as a hampering factor for the recovery. In addition, he argued that the domestic economy remains on sustained growth track and he is ‘encouraged’ by what happened in the US economy.
USD/CAD levels to watch
The pair is now up 2.18% at 1.2369 with the next resistance at 1.2400 and 1.2500 (psychological levels) followed by 1.2715 (high April 2009). On the flip side, a breakdown of 1.2115 (high Jan.20) would aim for 1.2100 and 1.2000 (psychological levels).