USD/CAD drops to 1.2740 on upbeat BoC

The Canadian dollar keeps the positive territory vs. its American neighbour today, taking USD/CAD to the area of fresh YTD lows in the 1.2750/40 band.

USD/CAD now looks to Poloz

CAD met extra bids after the Bank of Canada left its monetary stance unchanged at today’s meeting, broadly in line with market expectations.

However, the central bank sounded quite upbeat after saying that the output gap could now shrink by mid-2017 (vs. ‘end of 2017’ previous), while it has revised higher its growth forecasts to 1.7% in 2016 and 2.3% in 2017, from 1.4% and 2.2%, respectively.

Ahead in the session, the EIA will report its weekly stats on crude oil inventories, while BoC Governor Stephen Poloz is due to speak later.

USD/CAD significant levels 

As of writing the pair is losing 0.11% at 1.2758 facing the immediate support at 1.2700 (psychological level) followed by 1.2652 (low Jul.10 2015) and finally 1.2124 (monthly low Jun.24 2015). On the other hand, a break above 1.3051 (20-day sma) would open the door to 1.3208 (23.6% Fibo of 1.4692-1.2750) and then 1.3391 (200-day sma).