USD/CAD edging higher above 1.38 ahead of BOC policy change this week

On Wednesday at 1.45pm GMT the Bank of Canada is set to decide on monetary policy. At this stage it is not a question of whether, or not they will reduce their current 4.25% OCR (Official Cash Rate), but by how much. The latest jobs report, released the week before last and the CPI data released last week has led the markets to push for a 0.50% rate cut on Wednesday. So, that is the current consensus and no doubt the USD/CAD might continue to push higher the closer we get to that decision. Naturally, if it is just a 0.25% reduction, the USD/CAD will drop back at a rate of knots. The question is will the USD/CAD be much higher than where it is now, if and when a 0.50% cut is duly delivered? If that is the case, then at what point might such a cut be priced in? Well, not yet it seems, as the USD/CAD presses a little higher today. The US dollar closed on Friday at 1.3799. The high seen so far today has been set at 1.3826. The current 2024 high was set at 1.3946 on August 5 and as you can see, there is still some way to go before that level might be revisited again. The USD/CAD is currently trading at 1.3819