FX TALKING POINTS:
- Bullish USD/CAD[1] Sequence Continues to Take Shape Ahead of Bank of Canada (BoC) Testimony. All Eyes on Governor Stephen Poloz.
- USD/JPY Gaps Higher as U.S. Considers Trip to China. Same Old Bank of Japan (BoJ) Meeting to Fuel Larger Rebound.
BULLISH USD/CAD SEQUENCE CONTINUES TO TAKE SHAPE AHEAD OF BANK OF CANADA (BOC) TESTIMONY. ALL EYES ON GOVERNOR STEPHEN POLOZ.
Fresh comments from Bank of Canada (BoC) officials may impact the near-term outlook for USD/CAD as Governor Stephen Poloz and Deputy Governor Carolyn Wilkins are scheduled to testify in front the Standing Committee in Finance later today.
In light of the fresh updates from the BoC[2], the central bank appears to be on track to retain the current policy throughout the first-half of 2018 as ‘escalating geopolitical and trade conflicts risk undermining the global expansion.’ In turn, the BoC may continue to endorse a wait-and-see approach for monetary policy, with the Canadian dollar[3] at risk of facing headwinds ahead of the next meeting on May 30 as the central bank persistently tames expectations for higher borrowing-costs.
Bear in mind, fresh data prints coming out of the U.S. economy may also influence the exchange rate as the Gross Domestic Product (GDP) report is anticipated to show the growth rate slowing to a n annualized 2.0% from 2.9% during the last three-months of 2017, and a marked slowdown in economic activity may ultimately tame the near-term advance in USD/CAD as it limits the Federal Open Market Committee’s (FOMC) scope to extend the hiking-cycle.
Nevertheless, recent price action keeps the near-term outlook tilted to the topside as USD/CAD extends the
