US Dollar recovery stalls with the BoC and US ADP on focus.
The Bank of Canada will leave rates on hold at 5%.
ADP employment is expected to have improved moderately.
The Bank of Canada is expected to leave its benchmark interest rate on hold at 5% for the third consecutive time. Inflation has confirmed its cooling trend, although it remains well above the BoC’s 2% target, while the economy contracted in the third quarter.
BoC’s governor Macklem has maintained a hawkish tone in recent speeches, highlighting the strong price pressures and refusing any chance of rate cuts. Investors will be looking for hints of a dovish turn to sell Canadian Dollars.
Somewhat earlier the US ADP will release its November payrolls report. Job creation is expected to have improved moderately, to 130,000 from 113,000. These figures anticipate Friday’s Nonfarm payroll report, thus any significant deviation from the market consensus might boost USD volatility.
The technical picture is mixed with a recent bullish cross in hourly SMAs offering some hope for bulls. Resistances are 1.3595 and 1.3620. Supports remain at 1.3550 and 1.3480.
Technical levels to watch
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