The Bank of Canada held its benchmark interest rate unchanged at its meeting yesterday, stating that it sees a recovery once the price of oil rebounds. This prompted USDCAD to swing wildly between gains and losses, though it ended the day down nearly 0.5% - just above the 1.45 handle. Meanwhile, risk-off sentiment, caused by extreme volatility, across major asset classes caused investors to pile into the safe-haven Yen yesterday, spurring USDJPY to dip temporarily below 116 for the first time since January of 2015. Lastly, headline inflation figures in the US dipped back into deflation territory, coming in at -0.1% vs 0.0% expected, while core-CPI data also disappointed at 0.1% vs 0.2% forecasted. Overnight price action was uneventful in anticipation to today’s ECB meeting, the highlight of today’s economic calendar, where it is widely expected that no change in monetary policy will be announced. EURUSD has remained at approximately the same level since the ECB’s last meeting on Dec. 3rd, when the pair appreciated over 3% intra-day, and trying to talk down the currency may be the only option at the disposal of President Draghi currently. Elsewhere, the US will publish Philly FED manufacturing data, which is anticipated to remain in contracting territory, while unemployment claims are expected to fall slightly from last week’s 284K figure to 279K. CAD traders should be on the lookout for crude oil inventories released later this evening, after yesterday’s API data showed another massive build-up. |
