January 22, 2015, 09:30 GMT Top headlines: • ECB has its turn now • Canada unexpectedly cuts interest rates • USD edged up against its Yen counterpart • Aussie back to lows OVERVIEW: The Bank of Canada surprised the markets yesterday by cutting its interest rates by 25 basis points. The loonie has lost its value against all of its major counterparts lately and added more loses in the currency after the unexpected cuts were announced. Now, the focus turns to the Eurozone and the European Central Bank for the widely expected announcement of QE. Elsewhere, the Aussie is back to lows and the Greenback edged up against its Japanese counterpart. USD/CAD: The Canadian dollar dropped to 6-year lows against the US dollar on Wednesday after the Bank of Canada cut rates by 25 basis points in an unexpected move, in response to the recent sharp drop in oil prices. BOC has reduced its Economic Forecasts as government bonds are climbing and pushing yields to record lows. BOC Governor Stephen Poloz said at the press conference the central bank “has room to maneuver should its forecast prove to be either too pessimistic or too optimistic.” The BOC reduced its growth forecast for the first half of this year to a 1.5% annualized pace, from an October estimate of 2.4%. Inflation will slow to 0.3 percent in the second quarter, outside the central bank’s target range of 1% – 3%, the bank projected. Markets gave more pressure to the loonie when the pair was trading at already record lows against the greenback it saw loonie from 1.2050 level to reach 1.2376. Now, the pair is currently trading at 1.2347. EUR/USD: The euro slipped back against the dollar as markets await to see the European Central Bank announce its QE program, the way it will take place in the eurozone economy and most important the amount it would use. The ECB meeting will start at 12:45 GMT by the announcement of the Interest Rate decision and later on followed by the usual Press Conference by ECB President Mario Draghi. The single currency has been pressured lower also on the political uncertainty in Greece and the upcoming elections due on Sunday with SYRIZA the leftist party leading in polls. The single currency is currently at 1.1619. USD/JPY: Bank of Japan maintained the size of its stimulus program and reiterated its pledge to increase base money at an annual pace of ¥80 trillion through buying government bonds and risk assets. The central bank also cut its core inflation forecast 1% from 1.7% 3-months ago a projection and investors saw it positively as we saw the Yen strengthened across the board. The pair is currently at 117.70 level. AUD/USD: The pair is trading back to lows and after it touched 0.8223 level’s yesterday high. The pair traded as low as 0.8050 level almost 150 pips from yesterdays highs as the commodity based country is being hit by the very low prices in Oil. pair is cuurently at 0.8110 level and rebounded a little to move away from approaching 4-years lows. News to Watch CURRENCY TIME (GMT) INDICATOR FORECAST PREVIOUS EUR 12:45 Interest Rate Decision -0.05% -0.05% EUR 13:30 ECB Press Conference - - Disclaimer: MPF Global Markets Ltd research reports and analytics are provided to you for informative purposes only and they can in no way be considered as a recommendation or advice by MPFGM to you to engage in any trade. MPF Global Markets Ltd shall therefore not be held responsible for any outcome of your trading decisions in regards with these reports or similar reports. You hereby acknowledge that using the information detailed in these reports is at your sole responsibility and you will have no claims with regards to these reports against MPF Global Markets Ltd. If you do not agree to this, you are strongly advised not to use these reports.
Posted on: Thu, 22 Jan 2015 09:59:24 +0000
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