USD/CAD bounces off 2017 lows around 1.2950

The bid tone around the Canadian Dollar stays well and sound this week, dragging USD/CAD to record fresh YTD lows in the mid-1.2900s.

USD/CAD in multi-month lows

The pair’s bearish note remains intact so far, navigating levels last seen in September 2016 around 1.2950 against a backdrop of a stronger CAD, particularly after the Bank of Canada shifted to a more aggressive message, as per comments by Governor S.Poloz.

Market participants have already started to mull the idea of a rate hike by the BoC sooner than initially estimated, while yields of  the 2-year benchmark are testing levels last seen in March 2015 near 1.10%, from 0.67% since at the beginning of June.

Data wise today, US personal income rose more than estimated while personal spending and inflation tracked by the PCE matched forecasts. In Canada, GDP figures showed the economy expanded 0.2% inter-month in April, as initially estimated.

USD/CAD significant levels

As of writing the pair is retreating 0.18% at 1.2982 and a break below 1.2948 (2017 low Jun.30) would open the door to 1.2818 (low Sep.7) and then 1.2759 (monthly low Aug.18 2016). On the other hand, the next up barrier is located at 1.3000 (psychological handle) seconded by 1.3178 (10-day sma) and then 1.3284 (20-day sma).