USDCAD Awaits the BOC Later TodayThe pair has moved higher as the focus shifts to the BOC later today
The CAD has turned weaker over the last 24 hours as there have been reports that said that the Trump administration could revisit some of the old agreement with Canada and this could prove to be negative for the Canadian economy as it could lead to a watered down version of the agreements. This is in opposition to the positive developments that we had seen in the days before and hence the CAD lost some of its mojo.
USDCAD Moves Higher
This helped the pair to climb from the low 1.25 region towards the 1.26 region where it trades as of this writing. The NAFTA agreement is also up for negotiation and hence it is likely to a volatile and choppy time for the CAD in the short term. Looking ahead, Canada was expected to be one of the least affected by all the trade changes that are being brought into practice by the Trump administration but that is slowly beginning to get in doubt and bring the CAD on the backfoot. We have to see how the situation develops in the short term.
The CAD is expected to be the center of focus for the day today as the BOC meets and announces the rate followed by the statement. There is some part of the market that believes that the BOC could adopt a hawkish stance and push the boundaries by going in for a rate hike but on the other hand, a large part of the market believes that it would be a premature move. Even if the rate hike does not happen today, it is expected to happen in the next few months.
It remains to be seen how far the BOC would be willing to share the timeline that it has in mind as far as the rate hikes are concerned but the employment data, which came in much stronger than expected, is likely to have boosted the confidence of the BOC in the economy.