USD/CAD climbs as FX traders await BOC interest rate decision

NEW YORK (Forex News Now) – The U.S. dollar extended its rebound against the Canadian dollar on Tuesday, as FX traders awaited a key interest rate decision by the Bank of Canada.

In early European currency market trading, USD/CAD hit 1.0205, up 0.32 percent on the day, approaching Monday’s 6-day high of 1.0228.

The BOC was expected later to hold its benchmark interest rate, the Overnight Rate, steady at 1 percent. FX traders will pay particularly close attention to the rate statement that accompanies the central bank’s decision, seeking to discern clues to future shifts in monetary policy.

According to intraday analysis, USD/JPY was likely to touch support around the low of Oct. 14, 0.9979, and encounter resistance around the high of Oct. 5, 1.0273.

U.S. Treasury Secretary Tim Geithner, meanwhile, on Monday denied the U.S. was deliberately weakening the dollar to prop up its economy, amid rising tensions over Chinese and U.S. currency valuations.

Elsewhere, the loonie dropped versus the euro: EUR/CAD traded at 1.4206, up 0.23 percent, according to intraday analysis.