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USD/CAD stays rangebound after Bank of Canada keeps policy unchanged
Scotiabank cut its USD/CAD fair value estimate to 1.3974 and flagged potential further USD weakness toward 1.3981 support.
The Canadian dollar was little changed against the US dollar, with USD/CAD holding a tight, flat range after the Bank of Canada left policy unchanged, according to FXStreet citing Scotiabank strategists Shaun Osborne and Eric Theoret.
Scotiabank said the BoC maintained a cautious tone on growth and inflation. FXStreet reports that the Bank of Canada’s statement removed references to higher and lower interest rates, noted growth is improving but facing risks, and said inflation is high but slowing.
In Scotiabank’s view, Governor Macklem emphasized uncertainty and said the bank remained ready to act as appropriate. FXStreet adds that Macklem indicated the Canadian dollar was not a major factor in decision making.
Scotiabank revised its spot fair value estimate for USD/CAD down to 1.3974. FXStreet also highlighted technical expectations for further US dollar losses toward retracement support around 1.3981, with mild rebounds likely to be limited ahead of the low/mid-1.41 area.