BoC Highlights CAD Vulnerability

The pound was the top performer while the yen lagged as risk trades strengthened. Later, Kuroda and several second-tier releases highlight the calendar.

USD/CAD rose about 40 pips following the Bank of Canada decision.  The BOC maintained a slight dovish bias but there was nothing in the statement that screamed to buy the pair. If anything, across-the-board higher inflation forecasts due to rising energy prices and a softer loonie were a reason to sell USD/CAD.What stood out was the BOC emphasis that a pickup in exports and business investment is required to spur a sustainable recovery. The thing is, Poloz has been looking for that since he started at the bank and it hasn't come.

The BOC has expressed befuddlement and trend. All the elements are there, they say, but it's just not happening. Higher competition and offshoring help explain the export weakness but slow business investment is a problem in all developed countries.

Central banks have been wrong about investment for awhile and if it never truly materializes, all trades based on higher interest rates are at risk.

The Fed was also in the spotlight but Yellen revealed very little. The market was worried about hawkish commentary like we saw after the FOMC but there was nothing to hint a higher rates. She pointed to data and said downside risks to inflation are her chief concern.

The Beige Book noted a consumer spending pickup and that's a key factor for the near-term US outlook. Without spending (and business investment) sustainable new jobs will never materialize.

Up next, at 0000 GMT, BOJ leader Kuroda speaks and could offer some dovish hints. That's because the Japanese cabinet is rumored to be downgrading its economic assessment today for the first time since 2012. That's often seen as a precursor to central bank action.

At 0130 GMT, the quarterly business conditions index from the National Australian Bank is due. The prior reading was 8.