CANADA: USDCAD Reverses Initial Rally, Macklem Speech Awaited
Mar-20 16:44
- Crude markets have firmed after the US sanctioned a Chinese “teapot” refinery for the first time, alongside further tankers carrying Iranian crude. Uncertainty around any ceasefire arrangement in Ukraine added support, and price dynamics prompted a solid reversal higher for the Canadian dollar on Thursday.
- For USDCAD, the pair briefly traded back above 1.44 amid a poorer backdrop for risk sensitive currencies across the European morning. However, the pair has now reversed and hovers a little above session lows of 1.4316 as we approach the BOC Governor’s speech.
- Tiff Macklem is scheduled to speak on ‘Tariff uncertainty and monetary policy’ before Calgary Economic Development at 1305ET. The Governor’s text will be available on the Bank’s website at 1250ET, and at approximately 1410ET, Macklem will hold a press conference.
- Overall, the USDCAD bull cycle that started Feb 14 is intact. Note that the latest pullback has exposed a near-term key support at 1.4242, the Mar 6 low. Clearance of this level would undermine the bull theme and instead highlight potential for a test of 1.4151, the Feb 14 low and a bear trigger.
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