Today market outlook

[Zeologic]

USD/CAD draws indecision candle ahead of overnight rate

The USD/CAD currency pair yesterday drew a Doji candle with long shadows on the top and bottom lines near the upper band line on the daily timeframe. The price formed a high of 1.45212, a low of 143792 open 1.44341, and closed at 1.44326. This temporarily halted the previous two-day bullish trend.

The US jobs data released yesterday, JOLTS Job Openings by the Bureau of Labor Statistics showed 7.74M higher than forecast 7.65M from the previously revised 7.51M. Hires held steady at 5.4M, and total layoffs were little changed at 5.3M. Although job openings were slightly changed but decreased by 728K over the year.

The increase in these data figures somewhat supported the strengthening of the USD. The trade war initiated by United States President Donald Trump against Canada is the reason for the turbulence in the USD currency, including the USDCAD pair lately. Trump imposed 25% tariffs on Canada and Mexico on March 4. He also imposed additional duties on goods from China. Prime Minister Justin Trudeau has threatened to take action in response to Trump's policies. Trudeau said retaliatory tariffs on C$30 billion worth of U.S. imports would go into effect immediately, with more to follow.

The trade war continues. Trump announced an increase in tariffs on steel and aluminum imports from Canada to 50 percent in response to the Ontario government imposing a 25 percent tariff on electricity exported to the US.

Today, investors will focus on the Bank of Canada, which is scheduled to announce its latest interest rate decision, which is expected to be cut by 25 basis points from 3.0% to 2.75%. In addition, investors will also pay attention to the BoC statement,t which may provide subtle clues on Canadian dollar currency policy.

In the US, today will also release CPI data which is an important inflation data used by the Fed to determine their monetary policy. Core CPI is expected to fall 0.3% from the previous 0.4%, monthly CPI is also expected to be 0.3% from the previous 0.5% and annual CPI is expected to be 2.9% from the previous 0.3%.