The Bank of Canada will announce or constrict decision at 9:45 AM.
The Bank of Canada will announce or constrict decision at 9:45 AM. BoC expected to hold rates at 2.25%, maintaining a cautious, “wait-and-see” stance Policy balance: Weak growth and labor market vs. inflation risks from higher energy prices (US–Iran conflict) Inflation backdrop: Headline CPI rose to 2.4% (energy-driven) Core (Trimmed-Mean) eased to 2.2% (near target) Growth outlook: Sluggish economy + weak jobs data lean toward easing But risk of second-round inflation keeps BoC sidelined New forecasts expected: Higher inflation projections Lower growth outlook Key concern: Whether energy-driven inflation spills into wages and expectations Additional risk: Uncertainty around CUSMA renegotiations Market expectations: Pricing in a rate hike in Q4 2026 What to watch: Any shift in tone toward earlier tightening Or pushback against market pricing Bottom line: Likely no change and limited volatility, with emphasis on data dependency Ahead of the rate decision, USDCAD is trading marginally lower, holding within a tight ~21 pip range.
Zooming out, the pair has been locked in a broader ~120 pip range over the past nine trading days, with back-and-forth volatility keeping directional conviction limited. That consolidation has pulled the 100- and 200-hour moving averages together at 1.3666, creating a clear barometer for buyers and sellers. Staying above keeps the bias tilted higher, while a move below would shift the near-term bias back to the downside.
On the topside, the 61.8% retracement of the move from the March low at 1.3693 remains a key resistance level. The price tested and stalled against it earlier today. A break above that level, along with a push through last Friday’s high, would open the door for a run toward the 100-day moving average at 1.3731.