USD/CAD has posted slight gains in the Tuesday session. In the North American session, the pair is trading at 1.3464, up 0.14% on the day. It’s a light session on the fundamentals front, with no Canadian events. In the U.S., CB consumer confidence is expected to remain at high levels. The April reading came in at 129.2 and the May estimate stands at 130.1.
With a lack of key data early in the week, the markets are keeping a close eye on the Bank of Canada, which will set the benchmark rate on Wednesday. The rate has been pegged at 1.75% since October, and the bank is expected to hold the course. With this in mind, investors will be looking for clues about future moves from the rate statement. Will policymakers sound positive about the economy? The labor market created a record number of jobs in April (106 thousand), and consumer spending has been solid. At the same time, trade tensions between the U.S. and China have soared, which has hurt risk appetite towards minor currencies like the Canadian dollar. As well, oil prices have fallen, which has weighed on the Canadian currency. USD/CAD has been fairly subdued in recent weeks, and the tone of rate statement, whether optimistic or dovish, could shake up the currency from its doldrums.
