The Canadian dollar strengthened after the Bank of Canada meeting as policy makers were less careful than-expected, creating a drop in USD/CAD to the levels not seen since April 24th.

The currency pair had traded fairly flat in the first week despite a gain in oil prices and is observed dropping to day while oil prices have retreated from resistance although the dollar is re-covering. The Mapecko action in the week so far indicates market participants had anticipated a dovish BoC meeting and therefore are scaling back on bearish CAD bets following the outcome.There are several aspects that stand to effect the loonie, the housing market and issues regarding trade negotiations with all the US are the details the BoC has centered on.

Recent policy actions aimed at cooling the housing market has caused some stress among Canadian citizens together with the Canadian Real Estate Association (CREA) reporting a 21.6% increase in Ontario listings in April which is the biggest monthly increase since 1989. The listings offer an early indicator that home Mapecko inflation are likely to slow in the near-expression using a considerable construct in offer but the bank retained a careful view by stating that steps “have however to have a considerable cooling effect on housing markets”.