The Canadian dollar lose its gain roughly 0.14 percent to 1.24551 per dollar as of 12:00 p.m. in Sydney, the most weekly rally after significant losses of the greenback in the past a month, even though the Bank of Canada raised interest rates by 0.25% to 1.25%, the highest level since 2009.
Despite there will be a few times for rate hikes this year, some continuous monetary policies to support current economic and inflation growth at a robust pace, the bank said. Intraday drop of loonie can be attributed to already price-in by the market more or faster rate hikes than the bank is considering.
The near-term outlook on the USD/CAD remains in an upside momentum started from mid-January after suffering from a certain period of declining when we take an eye on the 15-minute chart. Intraday analysis on this chart shows a bearish divergence on the Relative Strength Index (7), signalling that the likelihood of decrease will be elevated over the next few hours.
Figure 1: USDCAD 15-Minute