USD/CAD advances to two-week highs near 1.3200 on oil selloff, BoC commentary
- WTI fell below $55 after EIA's crude oil stock report.
- Bank of Canada left the policy rate unchanged at 1.75% as expected.
- US Dollar Index stays flat on the day near 97.70.
The USD/CAD pair gained traction during the American trading hours and rose to its highest level in two weeks at 1.3185. As of writing, the pair was up 0.72% on a daily basis at 1.3180.
As expected, the Bank of Canada (BoC) on Wednesday announced that it kept its policy rate unchanged at 1.75%. Commenting on the policy outlook in a press conference, BoC Governor Poloz noted that heightened uncertainty about future trade policies were impacting business investment in a negative way and added that an accommodative policy was not needed at this time to address the downside risks.
Oil falls on larger-than-expected build in US stocks
Meanwhile, the weekly report published by the Energy Information Administration (EIA) revealed that crude oil stocks in the US increased by 5.7 million barrels in the week ending October 25th and weighed on crude oil prices. With the barrel of West Texas Intermediate (WTI) erasing more than 1% and slumping below $55 after the data, the commodity-related Loonie weakened against its rivals and allowed the pair to continue to push higher.
On the other hand, today's data from the US revealed that the real Gross Domestic Product (GDP) in the third quarter, expanded 1.9% according to the Bureau of Economic Analysis' first estimate. Although this reading came in better than the market expectation of 1.6%, the Greenback stayed relatively quiet as investors remain focused on the Federal Reserve's policy announcements.
FOMC Preview: What 11 major banks are expecting from October meeting?
Previewing the event, "We expect the Fed to cut for a third consecutive time at next week’s FOMC meeting. When re-assessing the three reasons the FOMC gave in July and September for cutting rates – i) signs of deceleration in economic activity, ii) prudency from a risk-management perspective and iii) the inflation outlook – we think a rate cut is warranted,” said Nordea analysts in a recently published report.
Technical levels to watch for