USD/CAD sinks to 1.2950 on steady BoC

USD/CAD rapidly plummeted to the mid-1.2900s after the BoC maintained its monetary policy unchanged at today’s meeting.

USD/CAD now looks to Poloz

Spot is now navigating 3-day lows in the 1.2990 area after the Bank of Canada left its overnight rate intact at 0.5%, broadly in line with market expectations.

The central bank has also revised higher its forecasts for inflation. It now sees consumer prices rising 1.6% in Q2 (vs. 1.3% prev.) and 1.5% in Q3 (vs. 1.2% prev.). In addition, the BoC now expects the output gap to close by end 2017, later that previous estimates.

BoC argued that the economy was hit by wildfires in western Canada, trade flows and consumer spending.

USD/CAD significant levels

As of writing the pair is retreating 0.61% at 1.2964 facing the next support at 1.2916 (55-day sma) followed by 1.2827 (low Jul.4) and finally 1.2674 (low Jun.23). On the other hand, a break above 1.3139 (high Jul.11) would aim for 1.3191 (high May 24) and then 1.3312 (38.2% Fibo of the 2016 down move).