Post #16178

Two Centrals Banks Battle It Out Today (USD/CAD) USD/CAD is coiling ahead of what could be the most consequential 24 hours for this chart in months — the BoC just spoke, and the Fed speaks at 1:00 PM CT. The BoC held at 2.25% as expected, fourth consecutive hold. The key language: Macklem is "looking through" the war's immediate inflation impact but warned the BoC will not let higher energy prices become persistent. CPI is expected to hit 3% in April. GDP forecast held at a soft 1.2%. The door to hikes is open but they're not walking through it yet. Canada's oil-exporter status is the wildcard. With WTI above $103, energy revenues are flooding in and supporting the loonie. But the broad dollar bid and soft domestic growth are capping the downside in USD/CAD. Now it's Powell's turn. A hawkish lean on inflation pushes USD/CAD higher. A neutral-to-dovish tone lets the oil-driven CAD bid take over. - Alan