USD/CAD erases losses, back above 1.2800

The Canadian dollar gained momentum across the board after the decision of the Bank of Canada to leave interest rates unchanged but then lost strength. Ahead of the end of the American session, USD/CAD is trading near the highs, up more than 50 pips for the day, and about to post the first daily gain out of the last four days.

USD/CAD rebounds from fresh lows

After the BoC statement and economic projections, USD/CAD bottomed at 1.2744, reaching the lowest level since July 2015. Then it rebounded and rose back above 1.2800. Recently it hit a fresh daily high at 1.2827.

Regarding the value of the loonie, today the BoC governor Poloz, said that a stronger CAD would be a downside risk to exports and growth.

Short-term bottom?

The pair continues to hold a bearish tone but today’s price action could signal a potential bottom. Price tested yesterday’s lows area but it failed to break lower and turned to the upside.

Tomorrow more inflation data will be released in the US with the March CPI while in Canada the New Housing Price Index.