Bracing for the BoC showdown, USD/CAD is maintaining its corrective mode from a monthly high of 1.3389, as the Canadian Dollar remains underpinned by improving domestic economic activity and tighter labor market conditions.USD/CAD is sitting at two-week lows near 1.3200 amid persistent US Dollar weakness and a sharp rally in WTI prices.
Markets are trading with caution ahead of the critical US Consumer Price Index data. The US S&P 500 futures are modestly flat on the day. The BoC policy announcements and Macklem’s presser will be key to the short-term direction in the USD/CAD pair in the aftermath of the US CPI data-led market volatility.on the BoC policy decision this Wednesday, stating, “we look for the BoC to hike another 25bps to 5.00% in July. Upward revisions to projections in the July MPR will provide the main catalyst for the hike but we do expect a more balanced statement relative to June after some further erosion of sentiment.