The USDCAD pair continues to chop around with not much of momentum in either direction over the last 24 hours. This is likely to continue for today as well as the focus shifts from the dollar to the pound for today and it is likely to shift back to the dollar tomorrow. In the meantime, the traders have to manage with the choppy action.
USDCAD Turns Choppy
The focus was on the dollar yesterday as well but the events of the day turned out to be a damp squib. First was the ADP employment report which came in stronger than expectations but this was balanced by the revision of the report from the previous month which was revised lower. This meant that the dollar went nowhere as the data balanced out each other. Then followed the more important FOMC minutes which was looked at very closely by the markets for any sign of the upcoming rate hike.
The market was hoping to see some hawkishness in the minutes which would more or less confirm the rate hike in December but what it got was minutes that was quite similar to the previous one. This served as a disappointment for the markets which showed its displeasure by selling off the dollar to a mild extent. The minutes did not rule out a rate hike and that was the reason why the sell off was not very huge as the market continues to wait for the data ahead to make up its mind.
Looking ahead to the rest of the day, we do not have any major news from the US or Canada for the rest of the day and so expect some more consolidation and ranging for the day. This is likely to give way to a lot of volatility tomorrow when the employment reports from both the US and Canada would be released.
This article was originally posted on FX Empire
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