Canadian dollar edged higher against its US counterpart on Wednesday, as market players awaited the release of FED minutes and the following statement by Chairman Ben Bernanke later in the trading day.
USD/CAD fell to a session low at 1.0494 at 11:14 GMT, the lowest point since July 4th, after which consolidation followed at 1.0520. Support was likely to be found at July 4th low, 1.0471, while resistance was to be met at July 8th high and nearly 21-month high, 1.0584.
US dollar was likely to find further strength if the minutes of FEDs June meeting and Ben Bernankes statement afterwards confirmed central banks intentions to begin tapering its monthly bond purchases.
“The fact that the foreign-exchange markets are entirely focused on the Fed at the moment means we haven’t had any strong signals for the Canadian dollar this week,” Greg T. Moore, a currency strategist at Toronto-Dominion Bank, said by phone from Toronto, cited by Bloomberg.
However, other experts saw quite a different scenario, regarding the USD/CAD cross, a further advancing of the Canadian currency.
“The risk is certainly to the downside for the U.S. dollar as this marginal pre-FOMC release selling of the U.S. dollar has shown,” John Curran, a senior vice president at CanadianForex Ltd., wrote in a note to clients, as imparted by Bloomberg. “We may not see enough detail to please expectations and an already long U.S. dollar crowd may want to ring the till on part of their trades.”, he also added.
Elsewhere, Canadian dollar was on lower levels against the euro, as EUR/CAD pair increased by 0.23% to 1.3486. Ultimately, GBP/CAD cross added 0.30% for the day, reaching 1.5703.
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