Trade Tensions Push CAD Lower as BoC Keeps Rates Unchanged
The USD/CAD pair has ticked higher to near $1.3863 as trade tensions between the US and Canada weigh on the Canadian Dollar.
According to TD Securities, the latest escalation in US-Canada trade tensions 'reinforces the CAD's role as a carry funding currency' and leaves them cautious on the Loonie.
The Bank of Canada (BoC) is expected to leave interest rates unchanged at 2.25% on Wednesday, with analysts at National Bank of Canada noting that the BoC will likely stay 'firmly on the sidelines.'
Higher US Treasury Yields due to rising oil prices continue to offer support to the US Dollar.
The USD/CAD pair is trading below the 20-period Exponential Moving Average (EMA) at $1.3896 and the 50.0% Fibonacci retracement at $1.3900, hinting that upside momentum remains subdued for now.