C$ fell from the high’s seen yesterday and remains weak this morning as oil collapsed over 3% on comments by the US Administration about excessively high prices. The market is also anticipating inflation numbers due tomorrow and Thursday that may impact on Bank of Canada Chief Poloz’s policy of lower rates. The market will be looking to see what impact recent commodity price increases are having on the economy. Look for C$ recovery today ahead of tomorrows numbers.
The US$ is quietly weaker this morning. The market will be watching Federal Reserve Chairman Powell speak before the Congressional Banking Committee as he answers questions about Fed Monetary Policy. The market will be looking for any change in the Fed’s accommodative pro-growth policy. Also, Pending Home Sales due to today have been trending rapidly downward for a year and the market expects even more weakness, which is a concern to the Fed. If this number is as expected the US$ will sink further.
The GBP is very strong this morning, hitting new high’s not seen for three months on comments by Brussels that Brexit deadline could be delayed, giving Prime Minister may more time to resolve opposition in her government. The EUR could also break to a new two-week high if GBP remains strong.
Key Economic Numbers: Forecast Previous
Factory Orders (Dec) 0.5% -0.6%
Pending Home Sales Yearly (Jan) -11% -9.8%
- Drummond Gill