All eyes are on whether the BOC’s policy rate cut will weaken the Canadian dollar

All eyes are on whether the BOC’s policy rate cut will cause the Canadian dollar to weaken

04.09.2024

In yesterday’s U.S. currency trading, the Canadian dollar fell against the yen ahead of today’s BOC policy rate announcement. The CAD/JPY pair dropped from 109.014 to 107.120, breaking below the support line of the 200-period simple moving average (SMA) on the hourly chart. On the daily chart, the pair has pulled back from last month’s highs, while on the weekly chart, the 75-period SMA is acting as a strong resistance level.We need to watch closely to see if the Canadian dollar will weaken further following today’s BOC decision to cut rates by 0.25%.

European currencies rose as the Swiss franc strengthened against the U.S. dollar following yesterday’s release of Swiss second-quarter GDP data, which showed a year-over-year improvement from the previous reading of 0.6% to 1.8%. The USD/CHF pair fell from 0.8537 to 0.8478, breaking well below the support line of the 20-period moving average on the hourly chart. On the daily chart, the downtrend that began after the pair touched the 10-period moving average continues, so traders should pay close attention to price movements during U.S. trading hours.

Today’s schedule includes: Australia’s real GDP at 10:30, China’s Caixin PMI at 10:45, India’s Services PMI at 14:00, France’s Non-Manufacturing PMI at 16:50, Germany’s Non-Manufacturing PMI at 16:55, France’s Composite PMI at 17:00, the UK’s Composite PMI at 17:30, and the Eurozone’sProducer Price Index, 7:00 PM South Africa BER Business Confidence Index, 8:00 PM US MBA Mortgage Applications, 9:00 PM Brazil Industrial Production, 9:30 PM Canada International Merchandise Trade, 9:30 PM US Trade Balance,22:45: Canada – BOC Policy Rate and Statement, 23:00: US – JOLTS Job Openings, US – Manufacturing Orders, 23:30: Canada – BPC Governor Maclean Press Conference, 27:00: US – Beige Book. We will need to closely monitor price movements following the release of these indicators to see if the BOC’s policy rate cut will cause the Canadian dollar to weaken.