Global Central Banks Take Center Stage as BoJ Turns Hawkish and Fed Leadership Shift Looms

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3550-1.3800

Euro                1.5850-1.6100

Sterling           1.8290-1.8540

WTI Oil (opening level) $100.73

The CAD/USD is opening at 1.3672 ( 0.7314 )

USD/CAD initial resistance emerges at the 100-day EMA around 1.3760, closely followed by the Bollinger 20-day SMA near 1.3767, where a recovery rally would likely face selling interest, with the upper Bollinger band far above near 1.3974 marking a more distant cap. On the downside, the lower Bollinger band at roughly 1.3560 offers the next notable support, and a clear break beneath this floor would open the door to an extension of the current decline.

Headlines

• The yen pushed higher after the Bank of Japan left its benchmark interest rate unchanged at 0.75% in a 6-3 split vote, with traders now seeing a 74% chance of a rate hike in June. The board raised its forecast for core inflation to 2.8% for this fiscal year, more than expected while revising economic growth of 0.5% from 1% previously. Attention now turns to Ueda’s press briefing at 6:30 GMT.
• The Federal Reserve is expected to leave interest rates unchanged at 3.5%-3.75% at its policy meeting on Wednesday, with the central bank gathering overshadowed by political drama surrounding the leadership handover. A Justice Department decision last week to drop a controversial criminal investigation of the Fed has cleared the way for the confirmation of Kevin Warsh, President Donald Trump's pick to replace Jerome Powell as Fed chair.
• US-Iran peace talks remain at an impasse, with efforts to restart negotiations stalled. Iranian media report that the conflict could end if the US lifts its naval blockade, agrees to a new legal framework governing traffic through the Strait, and guarantees there will be no future attacks. However, Trump’s red lines -including preventing Tehran from obtaining a nuclear weapon - remain a major sticking point separating the two sides.
• A packed week of central bank rate decisions is underway, with the Bank of Japan already meeting Tuesday, while the Bank of Canada, US Federal Reserve, European Central Bank and Bank of England all scheduled to set interest rates this week. This marks a rare week in which every Group of Seven central bank convenes.

Key Points

• Equities: US stocks held record highs, Europe slipped on oil and geopolitics, while Asian chips rallied on Hormuz hopes.
• Volatility: VIX holds near 18 in event-heavy week
• Digital Assets: Bitcoin stays below 80k while ethereum lags, with IBIT and ETHA weaker as positioning turns more cautious
• Fixed Income: Odds of BoJ rate hike rising after hawkish dissents and more hawkish guidance from BoJ meeting
• Currencies: JPY rallies on more hawkish BoJ, USD also firm on geopolitical concerns
• Commodities: Oil’s continued rally weighing on gold and silver