BOC Macklem. Far too early to be thinking of interest rate cuts. USDCAD tests key target.

Bank of Canada System Review was released earlier. Some highlights:

• The Bank of Canada (BoC) expresses increased concerns about households' ability to service debt due to higher borrowing costs compared to 2022.
• A rise in households facing financial pressure is anticipated in the coming years as mortgages are renewed.
• The recent decline in house prices has resulted in reduced homeowner equity, and early signs of financial stress, especially among recent homebuyers, have begun to emerge.
• A significant negative event, such as a harsh global recession with substantial unemployment, could further reduce house prices and lead to an increase in loan defaults among households.
• Large-scale defaults on uninsured mortgages with negative equity could potentially result in significant credit losses for Canadian lenders.
• The Bank maintains its concern over potential threats to financial stability from a significant cyber incident.
• Climate change is also recognized as posing significant risks to financial stability.
• Cryptoasset markets, however, do not presently pose a significant concern for the stability of the Canadian financial system.
• The Bank commits to continue closely monitoring the financial system for early indications of strain and confirms it has the tools to provide emergency liquidity to the financial system if severe stress were to occur.

Now BOC Macklem is speaking to the report and is also speaking on the economy:

• Expects inflation to continue coming down
• April is CPI data were stronger than expected, food price inflation much too high
• We are committed to getting inflation down to 2% target, number of things have to happen for that to occur
• Using conditional pause to see whether we've raised rates enough
• Far too early to be thinking of interest rate cuts

The USDCAD USD/CAD The USD/CAD is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed in order to purchase one US dollar. For example, when the USD/CAD is trading at 1.3500, it means 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the world’s most traded currency, whilst the Canadian dollar (CAD) is the world’s seventh The USD/CAD is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed in order to purchase one US dollar. For example, when the USD/CAD is trading at 1.3500, it means 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the world’s most traded currency, whilst the Canadian dollar (CAD) is the world’s seventh Read this Term is ticking to the upside, which is congruent with the overall USD move (may not be in reaction to comments).

Looking at the hourly chart below, the pair had a volatile up-and-down day yesterday but toward the end of the North American session was down testing its 200-hour moving average Moving average A moving average is a statistical tool that is used to smooth out short-term fluctuations in data and reveal longer-term trends. It is calculated by taking the average of a certain number of data points over a specific period of time, and then plotting that average as a line on a chart. The most common types of moving averages are simple moving averages (SMA) and exponential moving averages (EMA).In financial markets, moving averages are often used to analyze stock prices, exchange rates, and ot A moving average is a statistical tool that is used to smooth out short-term fluctuations in data and reveal longer-term trends. It is calculated by taking the average of a certain number of data points over a specific period of time, and then plotting that average as a line on a chart. The most common types of moving averages are simple moving averages (SMA) and exponential moving averages (EMA).In financial markets, moving averages are often used to analyze stock prices, exchange rates, and ot Read this Term. That was the last moving average target after breaking below the 100-day moving average, 100-hour moving average, and 200-day moving average in succession during the day. However, buyers leaned against the level and in today's trading have been able to extend back above the 200-day moving average, and the 100-hour moving average, and is now testing the 100-day moving average at 1.35085.

So whereas yesterday the price held support against the 200-hour moving average and the lowest of the MA levels, the high price today is testing the highest of the MAs at the 100-day MA. Do sellers lean as they leaned against the 200-hour MA yesterday? Sellers could put a stall on the pair against the 100 day MA with stops on a break above.