USD/CAD rebounds to 1.2990
The Bank of Canada next week will be a market mover.
A hike is virtually a sure thing at this point but the market will be watching for signals on what's coming next. The BOC has said it plans for gradual hikes but they also talked about stepping up the pace at the most recent meeting. Any further hint on that front could lift the Canadian dollar. The BOC may also weigh in on what the new NAFTA agreement means.
At the moment, the market is pricing in a 97% chance of a hike with an 18% chance of a back-to-back hike in December. The odds of a hike rise to 70% in January, up from 65% before today's BOC survey.
As for the chart, USD/CAD has rebounded to 1.2990 from a low of 1.2955. The bounce takes it to the 38.2% Fibonacci retracement.
The pair will be driven by oil prices and risk sentiment for most of this week -- until Friday when CPI and retail sales data are due. The BOC decision is Oct 24.
