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All Eyes on Whether the BOC’s Policy Rate Cut Will Weaken the Canadian Dollar

Market Report

All Eyes on Whether the BOC’s Policy Rate Cut Will Weaken the Canadian Dollar

04.09.2024

Today's Highlights
  1. U.S. MBA Mortgage Applications Index
  2. Australia's Real GDP

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 fell from 109.014 to 107.120, breaking below the support line formed by the 200-period SMA on the hourly chart.On the daily chart, the pair has pulled back from last month’s highs, and on the weekly chart, the 75-day moving average is acting as strong resistance. We need to remain vigilant to see if the Canadian dollar will weaken further following today’s BOC rate cut of 0.25%.

European currencies saw the Swiss franc rise against the U.S. dollar after Switzerland’s second-quarter GDP, released yesterday, improved to 1.8% year-over-year from the previous reading of 0.6%.The USD/CHF pair fell from 0.8537 to 0.8478, breaking well below the support level provided by the 20-period moving average (MA) on the hourly chart. On the daily chart, the downtrend that began after the pair touched the 10-period MA continues, so traders should pay close attention to price movements during U.S. trading hours.

Today, at 10:30, Australia’s real GDP will be released; at 10:45, China’s Caixin PMI;at 2:00 PM, India’s Services PMI; at 4:50 PM, France’s Non-Manufacturing PMI; at 4:55 PM, Germany’s Non-Manufacturing PMI; at 5:00 PM, France’s Services and Manufacturing PMI; at 5:30 PM, the UK’s Services and Manufacturing PMI; at 6:00 PM, the Eurozone’sProducer Price Index, 19:00 South Africa BER Business Confidence Index, 20:00 U.S. MBA Mortgage Applications Index, 21:00 Brazil Industrial Production, 21:30 Canada International Merchandise Trade, 21:30 U.S. Trade Balance,at 10:45 PM: Canada’s BOC Policy Rate and Statement; at 11:00 PM: U.S. JOLTS Job Openings and U.S. Manufacturing Orders; at 11:30 PM: Canada’s BPC Governor Macleam Press Conference; and at 3:00 AM: U.S. Beige Book.We need to remain highly vigilant regarding price movements following the release of these indicators to see if the BOC’s policy rate cut will cause the Canadian dollar to weaken.

桜井 慶介

Author: Keisuke Sakurai

He has over 10 years of experience in FX trading. In the financial sector, he has been involved in investment management focused primarily on foreign exchange markets and has experience as an asset management advisor. Drawing on his extensive experience, he specializes in technical and fundamental analysis.

Previous Article

With U.S. markets closed, should we wait and see which direction the USD/JPY pair takes as it shows strength?

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Should We Be Wary of Further Downside Potential for the CAD/JPY Pair Following the BOC’s 0.25% Rate Cut?
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