BoC keeps rates unchanged but stays cautious on the global outlook
Given the global outlook is key for the export-driven Canadian economy, the monetary policy statement has caused some nervousness in the CAD as the BoC announces rates remain unchanged and that the current level of accommodation is appropriate.
Even though GDP for Q1 was raised from 0.3% to 0.4% and Q2 from 1.3% to 2.3%, the market took its lead from the outlook, which is a similar theme to the testimony text of Fed chair Powell earlier, which was dimmed by uncertainties.
As such, USD/CAD was a little hesitant at first, but after a brief dip into 1.3070, USD/CAD has pushed higher again and is testing the persistent resistance in the 1.3135-45 area. As yet the spot rate is still struggling here, as offers are still coming in to frustrate the usual ebb and flow in this pair.
More resistance is seen into 1.3150, but looking across the board, the CAD has weakened against its counterparts elsewhere, giving back gains against the likes of EUR and GBP, as well as the AUD.