The Canadian dollar posted slight gains against the US dollar with the opening of the London session this morning. As of 10:10 a.m. London time, the US dollar traded at 1.3076 against the Canadian dollar.
Markets are highly anticipating today’s . These may lead to new volatility in the otherwise calm USD/CAD pair. Canada’s central bank is expected to hold rates steady at the current 1.75%. The Fed signaled multiple times that they would lower rates by 25 basis points, down from the 1.75-2.00% range.
Fed’s Powell has insisted that the rate cut should not be considered as the beginning of a new downward path in rates. Unless we see further deterioration of US economic fundamentals.
Besides the gathering of North American central bankers, today’s economic calendar is also busy with other important market reports. At 12:15 p.m. London time, the US reports ADP non-farm employment change. An expected reading of 125K m/m, down from last month’s 135K.
Fifteen minutes later, at 12:30 p.m., the quarterly change in the US GDP comes down the pipe, with the Street expecting a rise of 1.6% (annualized.) Both reports will be scrutinized by the markets ahead of the Fed meeting and can cause sharp price movements in the short run.
Although technical are somewhat recovering from oversold levels, the pair is still trading in a quite strong downtrend on the daily chart. July lows of 1.3015 remain an important support mid-term, while the September low of 1.3135 likely holds additional sell orders.