Will the BOC bring a challenge to the CAD traders?
The Bank of Canada (BOC) will release its rate statement alongside the monetary policy report during its meeting on January 22 at 17:00 MT time.
Greenback goes up a bit backed by soaring US bond yields
On Tuesday, the US currency appreciated a bit, retreating from the minimum for more than a week. The surge of the evergreen buck is associated with signals about the reduction of tensions in international trade, which led to the fact that the profit of American government bonds again exceeded the level of 3%.
The US dollar index, estimating the purchasing power of the US currency versus six key currencies, inched up by 0.04%, reaching up to 92.60, having dived to 92.11 on Monday - the lowest outcome since May 2.
The evergreen buck obtained support after the revenue of 10-year US government bonds rallied to 3,025% - the highest outcome for three weeks. If the yield of US bonds beats the value of 3,035%, recorded on April 25, then it’s going to be the highest outcome since the beginning of 2014.
The soar in the yield of US government bonds can be explained by the receding tension in trade relations between the United States and China after President Donald Trump expressed his wish to help restart the Chinese technology company ZTE.
The previous month, the Trump administration banned US companies from selling software as well as electronic components from the Chinese ZTE, which nearly paralyzed the work of the latter.
The previous week, the evergreen buck added to a maximum of four and a half months. However, then the US currency started falling after weak inflation data in America, while investors were disheartened by a more aggressive rate of interest rate lift in the US.
In March the Federal Reserve increased the interest rate and also gave a forecast for two more hikes this year, although a great number of market participants are assured that there will be three such increases.
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