The USD/CAD pair rose on Tuesday after the BOC decided to leave the benchmark interest rates unchanged and signaled it expects the rising value of the Canadian dollar to hurt economic growth in Canada and weigh down on inflation.
Canada also released the international merchandise trade for the month of February, where the trade balance showed a flat estimate, worse than the expected surplus of 0.5 billion CAD, where this indeed highlights the negative impact of the rising Canadian dollar on exports and accordingly economic growth.
The USD/CAD pair might continue its upside correction over the short term, especially as commodities prices are expected to undergo a correction, which will help push the USD/CAD pair to the upside, nevertheless, the USD/CAD pair should maintain its long term downside direction, given that the BOC signaled it might raise interest rates later this year.
Wednesday 12:30, the U.S. will release the retail sales index for the month of March, where retail sales rose in February by 1.0% and expectations signal that retail sales rose by 0.5 percent in March, as consumer spending continues to improve over a gradual pace.
Wednesday 18:00, the Fed will release the Beige Book, where the Beige Book is expected to show that economic activities continued to expand at a moderate rate, while conditions in the labor market improved as well, and inflationary pressures continued to rise amid rising energy prices.
Originally posted here
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