USD/CAD Bulls Assault 1.3470 Resistance As Oil Price Retreats And Boc Contradicts The Fed

USD/CAD remains on the front foot for the second consecutive day, extending the previous day's comeback from the weekly low to re-establish the intraday high above 1.3455 on Thursday morning. In doing so, the Loonie pair explains the disparity between the Bank of Canada's (BoC) and the US Federal Reserve's (Fed) monetary policy outlooks (Fed). In addition to the conflicting feeling, the latest decline in the price of oil, one of Canada's primary exports, may also be influencing the quotation.

The Bank of Canada (BoC) disclosed its monetary policy meeting minutes for the first time on Wednesday, highlighting the mounting calls among officials to halt rate hikes. In a similar vein, Tiff Macklemd, the governor of the Bank of Canada, requested more time to observe how people and companies adapt to increased interest rates before making any more adjustments. The official added, "Rate hikes have had a significant impact on homeowners."

Elsewhere, Fed Governor Christopher Waller foreshadowed a long fight with a 2.0% inflation target by citing expectations of tighter monetary policy for longer than projected. John Williams, president of the New York Federal Reserve, almost echoed these sentiments when he stated that the job market is extremely robust and that they have more work to do on rates, adding that data will determine the course of rate hikes. Lisa Cook, the governor of the Federal Reserve, stated that the central bank remains committed to restoring price stability, since inflation continues excessively high. She emphasized that they will need a restrictive monetary policy for some time.

It’s worth mentioning that the US diplomats were also expressing worries that defend the rising Fed rates and fuel the USD/CAD price. Among these, US Treasury Secretary Janet Yellen noted, “While inflation remained strong, there were positive signals that supply-demand imbalances were lessening in several sectors of the economy.” In a separate PBS interview, US Vice President Joe Biden predicted that the United States will not have a recession in 2023 or 2024.

On a separate page, easing concerns over the US and China combine with a stronger US Dollar Index (DXY) to impact on Oil prices, which were down 0.05% to $78.50 as of press time, allowing USD/CAD buyers to maintain control.

Moving forward, there are no major data/events scheduled for publication on the calendar, thus it will be crucial for USD/CAD pair traders to monitor central bankers' statements and other risk catalysts for clear direction signals.