- BOC leaves rates unchanged at 0.50%
- BOC lowers 2016 and 2017 growth forecasts
- US EIA crude oil inventories: +8028K vs. +3750K expected, +7600K previous
- Carney: Membership to EU “has boosted UK economy”
- AU NAB quarterly business confidence on tap
Most of the major currencies were in Rangeville, as forex traders refrained from taking on positions ahead of this week’s major events.
The biggest story of the hour was the Bank of Canada’s (BOC) monetary policy decision. As expected, the central bank opted to keep its interest rates at 0.50% after already cutting it twice earlier this year. What caught more attention, however, was the decision to DOWNGRADE its growth forecasts for 2016 and 2017. Yipes!
The BOC now expects the economy to grow by 2.0% in 2016 (down from 2.3%) and 2.5% in 2017 (down from 2.6%). Apparently, the central bank is expecting the “complex aftershocks” of lower oil prices to continue to weigh on the economy’s growth for longer than expected. Fortunately for Loonie bulls, the comdoll’s decline was probably limited when BOC Governor Poloz also assured the markets that there are “clear signs that Canada’s growth is picking up.”
Still, USD/CAD finished the session 138 pips higher (+1.06%) to 1.3138 while CAD/JPY plummeted by 106 pips (-1.15%) to 91.27 and GBP/CAD shot up by 172 pips (+0.86%) to 2.0258.
The rest of the major currencies were firmly in Rangeville, thanks partly to a lack of major catalysts and partly due to traders staying away from positions ahead of this week’s major events. Remember that there’s a chance that the ECB would introduce more QE in its policy decision while the UK is also set to print its retail sales data today.
EUR/USD slid by 16 pips (-0.14%) to 1.1339 while USD/JPY inched 12 pips lower (-0.10%) to 119.91. Meanwhile, GBP/USD saw a 33-pip dip (-0.21%) to 1.5419 and USD/CHF shot up by 15 pips (+0.16%) to .9596.
Will volatility improve for the rest of the major currencies today? Asian session forex traders only have to deal with Australia’s quarterly business confidence report out at 12:30 am GMT. The report doesn’t usually affect the Aussie’s price action for long, but it could set off short-term volatility for the Aussie pairs throughout the session.
If you aren’t trading comdolls though, then you might want to prepare for the U.K. and Canada’s retail sales, as well as the ECB’s monetary policy decision all scheduled today. Forex Gump has made excellent trading guides for the UK and ECB’s events, so you should check ’em out before you take on any trade opportunities.
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
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