U.S. Session Forex Recap – Dec. 9, 2015

  • Canadian building permits up by 9.1% in Oct vs. 3.0% forecast
  • Canadian housing starts up from 198K to 212K in Nov
  • U.S. JOLTS job openings down from 5.53M to 5.38M
  • BOC Gov Poloz: Central bank has tools beyond zero rates if needed

A bit of recovery was seen among commodity currencies, but the Loonie still lost ground to its forex counterparts when BOC Governor Poloz stepped up to the podium.

Major Events:

BOC Gov. Poloz dons dovish feathers – It looks like the oil price bloodbath is getting on BOC Governor Poloz’s nerves, as he pointed out in his latest testimony that the central bank has enough tools beyond zero interest rates to boost inflation and growth. Among these are negative deposit rates, forward guidance, and asset purchases.

“I certainly hope we won’t ever have to use these tools,” Poloz said. “However, in an uncertain world, a central bank has to be prepared for all eventualities.” Pretty good timing now that oil looks prime for another leg lower, huh? “We now believe that the effective lower bound for Canada’s policy rate is around minus 0.5 percent, but it could be a little higher or lower,” Poloz added.

Lower JOLTS job openings figure – Even though the latest JOLTS release measures job openings for October, this leading indicator did cause a bit of concern among U.S. investors since the reading dropped from 5.53M to 5.38M, worse than the projected 5.59M figure. Still, most forex analysts believe that it’s not bad enough to stop the Fed from hiking rates this month.

Major Currency Movers:

CAD – The Loonie just can’t catch a break, can it? The Canadian currency got another punch from dovish BOC hints, as oil prices appear to be facing further downside.

USD/CAD is up 89 pips to 1.3587 (+0.68%), CAD/JPY is down 83 pips to 90.55 (-0.90%), EUR/CAD is up 166 pips to the 1.4800 handle (+1.15%), and GBP/CAD is up 62 pips to 2.0380 (+0.30%).

EUR & CHF – Euro pairs are still in recovery mode, trying to regain its post-ECB bullish momentum after a day of consolidation. The franc is also putting up a good fight and even advancing against the euro.

EUR/USD is up 52 pips to 1.0889 (+0.48%), EUR/JPY is up 29 pips and testing the 134.00 mark (+0.22%), EUR/GBP is up 60 pips to .7260 (+0.85%), but EUR/CHF is down 27 pips to 1.0808 (-0.25%).

Watch Out For:

  • 12:30 am GMT: Australian Westpac consumer sentiment index (3.9% previous)
  • 12:50 am GMT: Japanese core machinery orders (-1.5% expected, +7.5% previous)
  • 1:30 am GMT: Australian home loans (-1.0% expected, +2.0% previous)
  • 2:30 am GMT: Chinese Nov CPI (1.4% expected, 1.3% previous)
  • 7:00 am GMT: Japanese preliminary machine tool orders (-22.9% previous)

See more:

Asian Session Recap

London Session Recap

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