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Bank of Canada Continues the "Hawkish" Monetary Policy
12/8/2022 12:49 PMThe USD/CAD pair is correcting against the local stabilization of the American currency quotes, trading at 1.3681.
The Bank of Canada made a decision quite expected by the markets and raised the interest rate by 50.0 basis points: the overnight rate was 4.25%, the bank rate was 4.50%, and the deposit rate was –4.25%. In an accompanying note, the regulator announced the continuation of the quantitative tightening program, and, in his opinion, the current measures have already begun to affect prices, which in base terms are 5.0%, but this is still not enough to stabilize the situation. Thus, the department's further rhetoric will depend on the dynamics of macroeconomic indicators.
The US dollar is holding at last week's close of 105.200 in the USD Index, but its volatility may increase slightly today as weekly jobless claims data are released. Analysts suggest that the Initial Jobless Claims will increase to 230.0K from 225.0K a week earlier, but the Total Claims will decrease to 1.600M from 1.608M a week earlier, and these are minor changes that, if implemented, will not have a serious impact on the USD/CAD pair.
On the daily chart of the asset, the price has broken the resistance line of the local downward corridor and is trying to consolidate above it.
The EMA fluctuation range on the Alligator indicator remains upward, increasing the likelihood of the trend continuing, and the AO oscillator histogram forms new bars in the buy zone.
Resistance levels: 1.3740, 1.3900. | Support levels: 1.3580, 1.3400.