USD/CAD hovers around 1.3375 ahead of the BoC’s decision

The USD/CAD pair exchanges hands between 1.3342-1.3417, ahead of the BoC’s monetary policy decision. Analysts expect the BoC to raise rates by 25 bps and to pause. It is worth mentioning that The BoC would release monetary policy minutes for the first time in its history.

The USD/CAD climbs toward the 1.3370 level after briefly touching its daily low of 1.3342, ahead of a crucial week for the Canadian Dollar (CAD), with the BoC setting rates for the first time in 2023.

In addition, the Leading Economic Index (US LEI) fell sharply again in December; signaling recession in the near term according to a statement by Ataman Ozyildirim, the Conference Board’s senior director for economics. The US dollar’s weakness keeps the USD/CAD from breaking to test the 200-day EMA. The USD/CAD is trading at 1.3375. The BoC monetary policy decision on Wednesday could keep the USD/CAD pair subdued.

Traders’ mood is positive amid the lack of Fed speakers due to the blackout period, ahead of the first Fed meeting in 2023. The Canadian economic calendar featured housing data, with the New Housing Price Index MoM edging to 0%, above estimates for a 0.2% contraction, while YoY eased from 4.1% to 3.9%. The Conference Board (CB) Leading Index in the US dropped to -1%, beneath the -0.7% estimates.