The Canadian dollar chalked up another winning day, thanks to positive expectations for the Bank of Canada’s interest rate statement. Although the central bank is widely expected to keep monetary policy unchanged, upbeat remarks are expected since crude oil prices have rebounded and Canada’s March jobs report beat expectations.
USDCAD is down to the 1.2900 handle, CADJPY rallied close to the 84.00 mark, EURCAD dipped to a low of 1.4715, and GBPCAD is down to the 1.8400 handle.
GBP recovers before UK CPI, BOE
The pound was also able to rake in some gains, as traders probably booked profits off their short positions ahead of this week’s UK event risks. Headline inflation is expected to hold steady at 0.3% while core inflation could rise from 1.2% to 1.3%. Other underlying inflation indicators such as the PPI and RPI could also post gains.
GBPUSD is up to the 1.4240 area, GBPJPY rallied to a high of 154.15, EURGBP is down to the .8000 support zone, and GBPAUD is down to 1.8650. The BOE is expected to keep interest rates on hold and asset purchases unchanged.
USD unsteady on Yellen meetings
The US dollar has been unable to establish a clear direction lately, as traders are wary of the uncertainty surrounding the recent Fed closed meeting for “expedited procedures.” In addition, Fed Chairperson Yellen has also had a meeting with President Obama and VP Biden to discuss the state of the US economy.
EURUSD is still consolidating around the 1.1400 major psychological level, USDJPY is down to the 108.00 levels, USDCHF is testing support at the .9500 handle, and NZDUSD rallied to a high of .6892.
US earnings reports could also have a significant impact on dollar price action, as analysts are expecting to see slightly weaker readings for Q1. Recall that the commodity price slump and the volatility in financial markets were very much in play for the first few months of the year, possibly weighing on company performance then.
Downbeat earnings figures from top US companies could weigh on equity indices, adding to the dollar’s declines. In addition, this could also impact overall market sentiment, possibly paving the way for more gains for the Japanese yen if risk aversion makes a comeback. Still, traders are also wary of potential BOJ intervention, as this prospect appears to have kept the yen’s gains limited in the past few days.
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