Canadian Dollar Weakens Against USD Amid Uncertain Sentiment
Oil Prices Fall, Risk Sentiment Uncertain
The Canadian Dollar faced weakening against the U.S. Dollar as oil prices experienced a decline and risk sentiment remained uncertain leading up to crucial data releases this week.
Rate Decisions and Nonfarm Payrolls Data Awaited
This week’s economic calendar includes rate decisions from the Bank of Canada and the U.S., with Nonfarm Payrolls (NFP) data scheduled for Wednesday, followed by Canadian employment data on Friday.
Expectations of Rate Cuts and Dovish Tone from BoC
The Bank of Canada is anticipated to maintain rates at 5%, with an 80% likelihood of rate cuts starting at the June meeting. Traders are eager for insights from policymakers and the BoC’s statement, watching for any dovish hints that could further impact the Canadian Dollar.
Market Analysis and Interest Rate Expectations
Analysts suggest that the BoC might signal a potential interest rate cut by leaning towards a dovish stance, potentially weakening the Canadian Dollar further. The currency pairing between the Canadian Dollar and U.S. Dollar remains influenced by interest rate expectations.
Fed Rate Trims and Employment Data Outlook
Traders are also attentive to the U.S. Federal Reserve’s potential rate cuts, with a 70% chance of a trim in June. Canadian employment data is expected to show a slight increase in the employment rate, projecting the addition of 20,000 jobs in February.
Technical Analysis and Price Movements
On a technical level, analysts highlight the 1.3600 handle as a key resistance level, with prices currently trading above the 200-day Simple Moving Average (SMA) at 1.3477.
