US stocks and oil slipped as Donald Trump threatened not to sign a long-awaited stimulus bill into law. The market sentiment had been already fragile, and Trump’s comments worsened it even more.
Big day for the Canadian dollar
Every meeting of the central bank is vital for the currency. Central banks can give comments that will set the currency trend until the next meeting, i.e. for the next month. The Bank of Canada is no exception.
Its meeting will take place on July 11. The interest rate and the central bank’s statement will be released at 17:00 MT time. The BOC Governor will hold a press conference at 18:15 MT time.
This meeting will be very important because the Bank of Canada will have to decide whether to raise interest rates for the second time this year. On the one hand, the BOC prepared the market for a rate hike at its last meeting in June. On the other hand, since then Canadian economic indicators deteriorated. As a result, it will be a real dilemma for the central bank. In such situation of uncertainty, there’s a great potential for surprise and, consequently, for big swings in the CAD exchange rate.
• If the BOC raises the interest rate, the CAD will rise.
• If the BOC leaves the interest rate, the CAD will go down.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.