The Canadian dollar began to show gains against the greenback dollar as market focus now focused on Bank of Canada (BOC) policy meeting tonight.
The currency previously recorded a slight decline following the rise of the US dollar amid mixed market sentiment volatility.
On the positive side, optimism over the launch of the Covid-19 aid package continues to support market sentiment, especially after the Trump Administration proposed another $ 916 billion stimulus measure.
However, what is a concern at the moment is that, with more stimulus measures proposed, this will make the situation more complicated for the US Congress to make decisions due to differences of opinion.
Unlike the European Central Bank (ECB) which is widely expected to relax its monetary policy, no action is expected to be taken by the BOC.
At the October meeting, the central bank maintained its monetary policy unchanged and projected this year's contraction to be smaller than previously expected. However, economic growth in 2021 is expected to be weaker.
While there are concerns over the economy due to the resurgence of coronavirus cases and sanctions across the country, after seeing good Canadian economic data and companies continuing to add jobs, the central bank is likely to maintain its current policy.
