RTTN: Canadian Dollar Mixed Ahead Of Bank Of Canada Rate Decision
The Canadian dollar showed mixed trading on Wednesday ahead of the Bank of Canada interest rate decision, which is due to be announced at 10:00 am ET.
The central bank is widely expected to keep interest rates on hold at 1 percent this time too, which has been so, for the past two-and-a-half years.
The central bank had not made any changes in interest rate since September 2010 and the Bank of Canada is likely to adopt the 'stay-pat' policy until the second-half of 2014.
The price of crude oil, Canada's key export, was moving lower today morning as traders await cues from the official weekly report on US crude oil inventories, due out later today.
Light Sweet Crude Oil (WTI) futures for May delivery, shed $0.67 to $88.05 a barrel. Yesterday, oil settled flat ahead of the weekly supply data, on a slew of positive macroeconomic data from the U.S. lifting hopes of demand growth prospects and with the dollar weakening against some major currencies.
Oil prices plunged more than two percent yesterday on some soft economic data out of China spurring demand growth concerns and two major agencies lowering their demand forecast for oil.
Tuesday during trading hours, the API said US crude oil inventories tumbled by 6.60 million barrels, while gasoline stocks rose 253,000 barrels in the weekended April 12.
The EIA will release its U.S. crude oil inventories report for the weekended April 12 at 10:30 am ET. Analysts expect crude oil inventories to gain 1.2 million barrels, while gasoline stock are seen shedding 0.80 million barrels last week.
The Canadian dollar extended previous session's downtrend against its US counterpart in early New York deals, falling to 1.0264 around 8:00 am ET, its weakest level since March 22.
The Canadian dollar is expected to extend downtrend against the greenback as a corrective bounce in the USD/CAD gained traction. Next key support levels to watch for the loonie are 1.0285, 1.03 and 1.0340/50.
The Canadian dollar reached as low as 95.20 against the yen before recovering some of its losses around 7:40 am ET. Further bearish extension could lead the pair test support around the 95.0 level and any probable continuation of recent recovery could help the pair challenge the 96.0 level.
The Canadian currency recouped some of its lost ground against the euro in early deals on Wednesday, snapping back to 1.3449 around 7:25 am ET from a fresh 5-week low of 1.3524 hit earlier in the session.
Looking ahead, the Federal Reserve is due to release its Beige Book report, comprising anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts, at 2:00 pm ET.
