It’s another tough day for CAD. Blame it on weaker oil prices and a lack of dealers given the U.S. holiday. Just the same, you could point a finger of blame at its “friends” at the central bank who meet Wednesday and are expected to keep rates steady despite a good economy. The chance of a hike is only at 21%, according to overnight index swaps.
Aniway raising rates is seen as just a matter of time. And July’s meeting — with its new forecasts and scheduled press conference — seems to many like a more natural moment to get back on the path of raising interest rates. While a nod to action may help, the cliche is that actions speak louder than words. And CAD could use help as it approaches a “multiple support” zone.
Break that and it’s an “extremely negative development” for CAD, which could send it sinking another 4.9%.
Trader Georgi Bozhidarov