© Paul Rosenberg
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While the BoC kept rates unchanged last week, they did express a more optimistic view than expected despite the impact of the Alberta wildfires. In light of the fires, the Central bank believes significant weakness could be felt in Q2, however, a strong rebound is expected quickly thereafter. The upbeat tone of the BoC spurred selling in USD/CAD.
What should a trader focus on this week in order to successfully trade this currency pair and what is your forecast for USD/CAD by the end of the week?
With a major event, namely, the BoC meeting, occurring so recently, it is unlikely that data with lesser impact, namely, the GDP figures, following immediately will have a strong influence on the USD/CAD currency pair. However, with Fed speculations rising for a June rate hike, Friday's non-farm payrolls could spark higher than normal volatility. Given the USD/CAD is in the middle of its trading range created over the past two weeks, between 1.3187 and 1.2836, it is difficult to determine ahead of Friday's data, which way the USD/CAD will head between now and then.