The US Dollar spiked against the Canadian Loonie in early Asian trade to an intraday high so far at 1.4145 from its New York close of 1.4085 and Friday mornings 1.3942. On Friday Canada appointed a new governor of the Bank of Canada (central bank). Tiff Macklem, an experienced central banker and a leading voice for the country’s transition into a green economy was appointed the 10th BOC governor. Macklem replaces Stephen Poloz in the Bank of Canada on June 2.
In his initial press conference, Macklem warned that Canada would not kick back to normal after the Covid-19 induced crisis. The new BOC head said he was comfortable with the lower bound of rates at 0.25% while guaranteeing a commitment to providing essential liquidity to the system.
The Canadian Loonie is still considered a Commodity currency, and in a risk-off scenario will weaken against the Greenback and other risk currencies (Yen). USD/CAD has immediate resistance at 1.4150 followed by 1.4200. Immediate support can be found at 1.4090 followed by 1.4050 and 1.4000. In the current scenario, expect the USD/CAD to trade in a likely, choppy range between 1.40-1.42. Prefer to buy dips.
