Relief for the Canadian dollar

22 January, 2016

There are two major currencies that have been one-way streets lower so far this year, namely the yen and also sterling. The Canadian dollar at least got a break yesterday, the first day of appreciation vs. the US dollar in 13 trading sessions, down by more than 4% so far this year, as the Bank of Canada kept rates on hold. The central bank was relatively upbeat on the economy, all things considered, which allowed short-dated bond yields to rise on the reduced prospect of easing later this year. But many in the market do not share the Bank of Canada’s optimism, especially as the oil price continues to travel south. Sterling is interesting because it’s not been an interest rate story so far this year, with the weakness of the currency more coming from the lack of safe haven properties, with a sizable current account deficit (to GDP) and a potential referendum on EU membership later this year. The overnight tone to equities has remained fragile, as has been the case with oil, Brent now comfortably trading with a 2 handle. Elsewhere, the yen has firmed on the back of comments from the BoJ undermining expectations of further near-term quantitative easing.

The main focus today will be with the ECB meeting result at 12:45 GMT, with the press conference following at 13:30 GMT. There are no expectations of further policy action, but naturally the euro will be sensitive to hints of easing measures given the recent volatility in financial markets and weakness of the oil price. The latter will mean that the ECB will likely see its projections for headline inflation for this year revised down at some point. The single currency itself has been holding up relatively well so far this year, largely because the dollar has corrected on the back of reduced expectations of Fed tightening and currencies are a relative game, so the euro is looking one of the least bad to be in.


Source link  
Markets recede from the recent highs

A strong Nonfarm Payrolls caused pressure on the stock markets, reducing the chances of the interest rates lowering by the Fed in the upcoming months...

Gold resumes rally, pushing past $1400

Gold prices resumed a push higher on Monday, as flows into the precious metal continued on improved prospects for easier monetary policy from...

Gold rises as markets slip

Market caution continues to support gold. Quotes of this metal rose to $1337, repeatedly trying to push above this year highs at the 1340-1360 area...


Trump says Brexit should happen

President Donald Trump promised the U.K. a "phenomenal trade deal" Tuesday, on the second day of his state visit to Britain...

Euro and Gold instead of Dollar

Gold rose on Monday to the highest levels since February, reaching $1327 per ounce. In the first hours of the Tuesday trading session, there...

Markets recover after the drop

The markets decline on investors' fears that trade conflicts will drag on and slow down demand, and this dynamic coincided with breaking through important...


Markets pressured by Huawei problem

Alphabet and some other American IT companies have suspended business with Huawei, which is one of the first examples of major consequences for...

The climate is changing rapidly

British people need to fly less, drive electric cars, eat little meat and turn their home thermostats down to 19 degrees Celsius (66 Fahrenheit) in order to rein...

Chinese stocks saw their worst week

Chinese stocks have taken investors on a ride this year. Shanghai and Shenzhen have been the best performing global markets this year, with the Shanghai...

  


Share it on:   or