Summary:
-
CAD jumps as BOC deliver hawkish hike; ZAR drops back
-
Another large inventory build keeps oil under pressure
-
Sterling slips to 6-week low
-
3 big events, 3 markets to watch
There’s been a strong move higher in the Canadian dollar in the past few minutes after the Bank of Canada announced another interest rate hike. The move higher of 25 basis points to 1.75% for the overnight rate was widely expected with markets giving such an event as high as a 93% probability beforehand. GIven this the hike itself isn’t likely to be the cause of the pop higher in the Loonie, rather it is a clear hawkish shift in the accompanying statement. Perhaps the biggest takeaway is the dropping of the word “gradual” from the statement when describing how rates will be increased going forwards, implying that the pace may well be faster going forward. In addition the bank also upgraded its outlook for investment and exports and committed to raising rates to a neutral setting.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile appA fourth consecutive 6M+ build in the weekly DOE crude oil inventory release shows that US stockpiles continue to rise, but compared to last night's monster rise in the API equivalent and when the components of the report are considered it may not actually be that negative for the price of oil. Oil is actually showing a small gain on the day after the release with the market looking to recover from Tuesday’s heavy declines. Lows around 75.20 coincide with prior swing levels and a failure to force down below them could allow a recovery toward 78.95.
A rally in the pound yesterday afternoon on reports of a breakthrough in the Irish border dispute has proved short lived with sterling coming back under pressure today and falling below the $1.30 handle. The GBP/USD cross is now back near the lows seen at the beginning of the month and on a trade weighted basis the pound has actually hit a 6-week low. Politics continues to weigh on the pound with Theresa May’s position remaining under near constant threat as she is set to address Tory MPs later today with calls growing for her to be replaced.
There are 3 big events in the coming days and 3 markets to watch over these are as follows:
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
