USDCAD slumps to daily low giving up over 50 pips after the Bank Of Canada kept it’s benchmark interest rates unchanged as widely expected by markets. The Bank Rate now is 2% and the deposit rate is 1.5%.
Meanwhile another dismal data came out of U.S. as the United States ISM Non-Manufacturing PMI came in at 53.9 below expectations of 54.5 in November, putting additional pressure to an already vulnerable USD today.
Trade Tensions Downside Risks Persist
The central bank of Canada noted that the global economy is stabilizing and the projections from the October meeting is intact. The trade tensions increase the risk to the downside. Canada’s investing spend growth was strong in the 3Q. BoC projects inflation to stay around the 2% level in the next two years.
The financial markets have been supported by the central bank policy actions around the globe, while have been dragged by trade tensions.
BoC Closely Monitors Global and Canadian Data
BoC future interest rate decisions will be guided by the Bank’s continuing assessment of the impact of trade tensions against the sources of resilience in the Canadian economy, the consumer spending and housing investment activity.
USDCAD Breaks Below the 100-day Moving Average
The USDCAD is under heavy selling pressure after the news mostly because of the upbeat outlook, as the decision was widely expected.
The pair breached the 200-day moving average without any resistance then broke the 100-day moving average and met the support at 1.3218 where the 50-day moving average crosses.
USDCAD Levels To Watch
Bears are in control now and traders attention turns to lower levels. Immediate intraday resistance stands at 1.3218 the daily low and the 50-day moving average. If today the pair settles below that level will open the way for a move down to 1.3189 the low from November 19th.
On the other hand, now the pair faces the resistance at 1.3279 the 200-day moving average. If the pair manages to close above the daily top at 1.3279 will cancel the intraday negative momentum and bulls will be back in the driver’s seat. Next level to watch for USDCAD is the 1.3327 supply zone that caps the pair since November.