USD/CAD higher after the trade balance numbers
How hard is the rally in the Canadian dollar hit to the economy?
It may be more difficult than expected. August was the second full month with a strong Canadian dollar, USD/CAD traded between 1.25 and 1.28 before falling to 1.21 in September.
These levels can be put more pressure on the economy and believed that the international merchandise trade deficit in the month, to $3.41 billion, more than the $ 2.60 billion expected and $2.98 billion in July.
USD/CAD jumped to 1.2542 of 1.2475. Which breaks Tuesday’s high of 1.2539, the strongest level since August 31.
There is a growing belief the Bank of Canada not raise rates again this year. The chances of a hike in October have once been above 50%, but decreased to 18.7%. For the month of December, the odds have dropped from a peak of 80% at the beginning of the month to 65.2%.
Pimco and blackrock both say the uncertainty surrounding the negotiations of the NAFTA, muted inflation and forecasts of
the slowdown in growth once fiscal stimulus fades, it is unlikely that the BOC will raise rates again by the end of the year.
Technically, the USD/CAD pair is in the process of eating in the August 31, range which extends up to 1.2663, which is a level that looks more and more likely. However, this depends on what happens with the us economic data.