USDCAD Overnight Range 1.2405-1.2496
It appears that Mr. Poloz has taken the 1980 Devo song to heart and decided to whip the FX markets and whip’em good. After whipping the Loonie to Fifty Shades of Down last month, he used yesterday’s speech and lashed the Loonie Fifty Shades of Up. Last month’s rate cut was blamed on “falling oil prices being unambiguously negative for Canada”.Yesterday,not so much. The rate cut was just insurance. March rate cuts predictions were tossed out the window while Mr. Poloz gleefully clapped “it’s an exciting time to be a Central Banker.” Expectations for another rate cut on Tuesday were tossed out the window along with USDCAD bulls and the Loonie gained over 2 cents.
Meanwhile, the debate rages as to whether Ms. Yellen’s speech was hawkish or doveish. Her comments were fairly upbeat leaving scope for a June hike on the table.Unfortunately,it seems that FX markets expected her to declare June, FOMC Rate Hike month and were disappointed.
Tomorrow’s US economic data releases will be important signposts as to whether a June rate hike is still on the table.
USDCAD technical Outlook
The intraday USDCAD technicals are bearish following the break of 1.2490 and 1.2440 which targets the 1.2340-60 area. A break here risks further losses to 1.2050. For today, USD support is at 1.2405 and 1.2380. Resistance is at 1.2450 and 1.2470
Today’s Range 1.2380-1.2450