USD/CAD: Canadian dollar edged down on dovish talks by BOC

• CAD edged down on dovish talks by BOC’s Schembri.
• CAD was earlier helped by a rebound in oil.

USD/CAD is now trading around 1.2496 in the New York session, up by almost 0.05% on some dovish  talks by BOC despite widespread weakness in US dollar and some recovery in oil. So far USD/CAD made a session high of 1.2536 and low of 1.2464.

Today BOC’s Schembri said that: “Subdued growth may change how central banks react. Higher debt levels, decline in interest rates, decreasing economic growth could challenge policy framework. If cyclical forces coming out of a downtrend are less powerful than historically because of demographics and debt, central banks might have to be more aggressive. BOC's 2% target is symmetric. Negative policy rates in some jurisdictions appear to be less effective in stimulating economic growth. Caution doesn't mean rates will stay low forever."

As par Schembri, "The cyclical forces that normally help to propel an economy out of an unexpected downturn, namely business and residential investment as well as purchases of large durable goods, may be less powerful, especially if debt levels are high and confidence is slow to rebound. Bank will take a cautious approach to interest rates”.

Thus BOC’s Schembri sounds quite dovish today. The huge drop in Canadian employment in January may have compelled to keep BOC on the sidelines in the months ahead.

Technically, for USD/CAD, the area of 1.2447 is now a vital support.