On Friday, the evergreen buck rallied versus its counterparts reacting to a rebound in American home sales, although profits were tamed by a steep soar in the Japanese yen as American government bond gains dived in the face of worries of the decelerating…
The Bank of Canada meeting: results
Canadian central bank left the Overnight Rate unchanged at 1.5%.
In its statement, the Bank of Canada claimed that:
- The recent economic data are in line with the forecasts.
- Canadian GDP growth will slow down temporarily in the third quarter, mainly because of fluctuations in energy production and exports.
- Although CPI inflation was at 3% in July, it should move back towards the target of 2% at the beginning of the next year.
- Trade tensions represent a key risk and are affecting some commodity prices.
- Financial stresses have intensified in some emerging markets but are not spreading.
- The central bank is closely monitoring NAFTA negotiations.
- Higher interest rates will be necessary to achieve the inflation target. The Bank of Canada will act gradually, depending on the economic data.
So, there nothing to contradict a rate hike in October, but at the same time, there’s no blunt statement that the increase will happen.
USD/CAD keeps trying to stick above the resistance at 1.3180. The statement of the BOC couldn’t support the Canadian dollar to pull the pair down. If the pair is able to close above 1.3180, there will be odds of the further rise. The next resistance is at 1.3219. However, if there is a progress in the NAFTA deal, the CAD will be able to fight with the USD. The support lies at 1.31.
On the daily chart of CAD/JPY, 50-day and 100-day MAs don’t let the pair go up. Moreover, the JPY is stronger against the CAD because of the risk-off sentiment of the market. Traders worry about the NAFTA uncertainties. As a result, there are risks of the pair’s fall. Supports are at 84.35 and 83.58. If there is a progress in the deal today, the pair will stick above 84.35. The resistance is at 84.85.
GBP/CAD has significantly risen on the optimistic Brexit news. The pair has already tested above the 50-day MA and the resistance at 1.7058. If the pair closes above the resistance, the further rise is anticipated. The next resistance is at 1.7217. In case of the progress in the NAFTA talks, the pair may weaken. The support is at 1.6890.
On Friday, the UK pound revived in Europe trade from Thursday’s buffeting when the EU admitted only a minimal extension of the deadline for Brexit…
Canada will release the level of core retail sales and CPI on March 22, at 14:30 MT time.
Safe havens such as gold and Japanese yen declined as investors sentiment was boosted by eased geopolitical tensions…
On Tuesday, the euro tacked on because market participants waited for reports on inflation and growth in the euro zone, while the Japanese yen went down after Japan’s major bank told it would be more flexible in its huge stimulus program…
On Tuesday, the evergreen buck dived because the common currency bounced off and the UK pound managed to ascend to the day’s maximums reacting to reports that British Prime Minister Theresa May is going to take control of Brexit talks…