The Bank of Canada lefts rates unchanged but the USDCAD rate changed and changed quickly. It was comfortably bid at 1.2520 prior to the news and quickly dropped to 1.2450. The BoC stated ”Financial conditions in Canada have eased materially since January, in response to the Bank’s recent monetary policy action and to global financial developments. This easing is reflected across the yield curve and in a wide range of asset prices, including the Canadian dollar. These conditions will mitigate the negative effects of the oil price shock, further boosting growth through stronger non-energy exports and investment.”

Arguably, the statement suggests that a rate cut at the April 15th meeting is unlikely. The combination of modestly higher oil prices, a neutral BoC and, if today’s ADP employment report (Actual 212K vs Forecast 220K) is any indication, the risk of a soft NFP report on Friday, points to a weaker USDCAD

Overnight, the Asia session saw a bit of choppy trading with AUD, NZD and JPY eking out gains which was likely just “noise” ahead of Thursday’s ECB meeting and Friday’s US nonfarm payrolls release. The European story was EURUSD which took another dip lower, probing support in the 1.1100-05 area. Oil prices were a tad firmer on news that the Saudi’s bumped prices for crude deliveries to Asia and the US.

USDCAD technical Outlook

The intraday USDCAD technicals are bearish with the move back through 1.2490 suggesting further losses to 1.2360-80 on a break of 1.2440. Failure to break 1.2440 points to additional 1.2440-1.2560 consolidation, until Friday’s employment reports.

Today’s Range 1.2440-1.2510