CAD Broadly Softer after BOC Decision, Euro Volatility Expected

Published: 22 Jan at 12 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada,

Pound Sterling
Although the UK’s public finance figures showed a widening in the budget deficit, the Pound was still able to record modest gains against peers like the US Dollar and Euro. Sterling was supported by a BoE official talking down UK inflation concerns. However, tomorrow’s UK retail sales report could see Sterling slide as a month-on-month decline of -0.7% is expected.

US Dollar
With the Bank of Canada’s interest rate decision increasing demand for the safe-haven US Dollar, the currency closed out the local session trending slightly higher against several of its peers. Further ‘Greenback’ movement could be caused by today’s US initial jobless and continuing claims figures.

Euro
The common currency fluctuated over the course of the European session as investors focused on the upcoming European Central Bank policy decision. If the ECB should roll out a substantial QE programme we could see the common currency fall to fresh lows against its major counterparts.

Australian Dollar
Rising expectations for a Reserve Bank of Australia interest rate cut saw the ‘Aussie’ edge lower overnight. The commodity-driven currency was also pressured by lower Consumer Inflation expectations.

New Zealand Dollar
Although New Zealand’s consumer confidence report showed improvement in January, the New Zealand Dollar failed to benefit from the data. Instead, commodity price pressures and the BOC decision drove the ‘Kiwi’ lower during the local session.

Canadian Dollar
While many economists had anticipated the Bank of Canada leaving interest rates on hold yesterday, the central bank actually responded to the collapse in oil prices by cutting the benchmark interest rate for the first time since 2010. The decision provoked extensive and widespread ‘Loonie’ losses and the currency remains trading in a weaker position.
As of Thursday, 22nd January 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3229, GBP USD exchange rate was 1.5006, GBP AUD exchange rate was 1.8723, GBP NZD exchange rate was 1.9996, and GBP CAD exchange rate was 1.8586.

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