Technical analysis and trading recommendations - https://fxpcm.com/fx/usdcad-what-will-head-bank-canada-tell-19042016
Overview and Dynamics
At 15:00 (GMT) today scheduled speech of the Bank of Canada S.Poloz. As you know, the Bank of Canada last week left interest rates unchanged at 0.5%, although previously repeatedly stated commitment to further easing of monetary policy in the country until the introduction of negative interest rates.
At the same time the central bank raised its forecast for economic growth in Canada in 2016, noting that the new fiscal measures the Canadian government should provide "significant positive impact" on the economy.
The Canadian dollar over the past few months, strengthened against the US dollar at a faster rate than it would like the central bank of the country. A significant role in this process is played by rising oil prices, the main export product of Canada.
A stronger Canadian dollar, as the head of the Bank of Canada S.Poloz can put export growth under threat, and oil prices are leading engine of the Canadian dollar changes.
The failure of the talks of representatives of the largest oil producers in Doha on Sunday caused a sharp decline in oil prices, which directly affected the quotations of commodity currencies, particularly the Canadian dollar. Pair USD / CAD rose sharply on Monday, however, after the oil prices, the Canadian dollar fully restored by the end of the day lost earlier position. Oil prices and commodity currencies rebounded after the message about the strike of workers of the oil industry in Kuwait on Sunday, which led to lower production levels in the country twice.
However, many oil experts believe that the next OPEC meeting to be held on June 2 and is unlikely to lead to an agreement on the limitation of production. This will lead to the fact that oil prices could go back to 30 dollars per barrel.
If the oil price quotes will move down towards the recent lows below $ 30 a barrel, given that oil prices are the main criterion for changes in the Canadian dollar quotations, USD / CAD pair will return to the global upward trend, which lasts virtually since mid-2011.
From the news today also pay attention to the 20:30 (GMT), when the American Petroleum Institute (API) will publish its report on the change in US oil inventories last week. Growth stocks tend to have a negative impact on the price of oil and, consequently, the quotations of the Canadian dollar and vice versa.