US dollar was trading lower against its Canadian counterpart on Monday, as market players awaited the release of the minutes of Federal Reserve Banks July meeting amid ongoing speculation over the possible timing of banks asset purchase scale back.
USD/CAD slid to a session low at 1.0320 at 14:20 GMT. Support was likely to be received at August 16th low, 1.0292, while resistance was to be encountered at August 16th high, 1.0359.
Market players awaited the release of the minutes of Federal Reserve Bank’s July meeting, scheduled on Wednesday, as it may provide clues on when the central bank may begin tapering its stimulus program. Policymakers will probably begin to pare back the central bank’s bond-buying program in September, according to 65% of experts in a survey by Bloomberg. Such expectations were boosted after on August 15th a report said that the weekly initial jobless claims in the United States decreased in number to their lowest in almost six years.
Meanwhile, the loonie, as Canadian currency is also known, was slightly higher against the euro, with EUR/CAD cross ticking down 0.04% to trade at 1.3783 at 14:25 GMT. The euro was supported after earlier today Germanys Bundesbank said that the European Central Bank’s (ECB) forward guidance on interest rates in July was not an “unconditional commitment”. Traders reacted immediately to the prospect of ECB raising the benchmark interest rate in case inflationary pressure occurred. Such an action implied that market participants took the above-mentioned statement by Bundesbank as a sign, that interest rates may not remain on the current low levels for as long as previously anticipated. Bundesbank reported also that Germany and euro zone member countries could benefit from record low interest rates. However, the report by the German central bank added that ECB’s pledge to maintain interest rates at low levels for an extended period would continue depending on the intermediate-term inflation outlook. Upon the release of this report, EUR/USD pair advanced more than 40 pips to 1.3374. On the other hand, GBP/USD hit 1.5672, the pairs highest point since June 18th, during the early phase of US session.
Ultimately, GBP/CAD cross was gaining 0.07% on a daily basis to trade at 1.6171 at 14:39 GMT.
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