FXStreet (Delhi) – Research Team at TDS, suggest that all eyes will be on the Bank of Canada meeting which is expected to leave the overnight rate unchanged at 0.50%. Key Quotes “The accompanying Monetary Policy Report (MPR) should contain downward revisions to Q4-2015 and 2016 growth due to dimmer international prospects. We think it remains premature for the Bank to sound optimistic despite Q3 GDP tracking nearly a full percentage point above their estimate in the July MPR (which is at 1.5%) especially as US growth has decelerated (the Atlanta Fed is tracking 0.9% q/q ann. for Q3).” “Overall, we think the communique and MPR will lean towards the cautious side but the risk is that the Governor sounds a touch more upbeat at the press conference so a dip into the 1.28/1.29 region should be bought (we see key support at 1.2830 and 1.2900). We see key resistance at 1.3070/80.” “We believe that downside in USDCAD is limited as it is essential to the economy’s rebalancing act and material CAD strength may see the BoC intensify its rhetoric that a weak currency is a key shock absorber.” “And, with signs of slippage in US growth—especially in sectors that matter for the Canadian export sector (US manufacturing is effectively in recession) - a weak CAD will be necessary to offset a downshift in demand.” “Oil prices are expected to remain low through most of 2016 which present downside risks to business investment. On balance, we think that the balance of risk tilts towards the upside for funds as we expect concern over the international backdrop (and downgrade to growth both domestically and in the US) to weigh on markets.” “Our daily fair value estimate stands at 1.2840, weighed down by interest rate spreads but note that the rolling correlation (on a 1-month and 3-month basis) with USDCAD has deteriorated since mid-August so we do not think that it offers an effective anchor point at the moment.” For more information, read our latest forex news.