The data of the April CPI, higher than expected, served to reduce the expectations of a trim of BOC rates in June, exerting moderate downward pressure on the differentials of interest rates between the US and Canada, says Shaun Osborne, head of Strategy Strategy of Scotiabak.
The trend momentum oscillators are showing bearish signals for the USD
“The markets continue to assess some risk of a trim of the BOC – Cotia anticipates that the rates will be maintained in the June decision at this time – but the reduction in the short -term rates differentials has provided a slight tail wind for the CAD against a generally weaker USD today. The estimated FV for the spot has fallen to 1,3868 this morning.”
“The narrower differentials should also help reinforce the USD seller interest in or a little above the 1.40 area. Note that the Minister of Finance Champagne and the governor of Bock Macklem will speak tomorrow afternoon at the end of the G7 meeting.”
“The spot has found a solid resistance above the 1.40 area so far in May and the weakness below the support in 1,3895/00 today indicates the potential of a deeper fall in the back backgrounds to the range of 1,3750/1.38 The USD rebounds.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
