The US Dollar eased away from the recently struck 3-year trough after rising yields on US Treasury instruments encouraged some buyback of the Dollar. Nonetheless, market players remain wary of the greenback’s outlook. One FX strategist in London believes that the Dollar’s bounce is not likely to be enduring unless there is a meaningful pickup in inflation figures. Meanwhile, the Euro is still under some pressure after comments by one policymaker from the European Central Bank left markets pondering the ECB’s next move. Ewald Nowotny reportedly said that the recent strength of the Euro was unhelpful; only a week until the ECB’s next policy meeting, that has prompted FX traders to consider the ECB might want to better control the Euro’s rise.
As reported at 11:11 am (GMT) in London, the EUR/USD was trading at $1.22, a gain of 0.50%; the pair is still below yesterday’s high of $1.2323, a level not seen since December 2014. The EUR/GBP was trading at 0.8827 Pence, a gain of 0.17%. The GBP/USD was up 0.34% and trading at $1.3855.
NAFTA Cancellation Threat Hits Loonie
In Canada, the Loonie fell against its US counterpart after the latest policy move by the Bank of Canada. As largely expected, the BOC raised its benchmark lending rate to 1.25%, a hike of 25 basis points. Analysts point out that the BOC’s statement called for caution, especially regarding some upheaval to NAFTA, the North American Free Trade Agreement negotiated among the US, Canada and Mexico. US President Donald Trump yesterday discussed the possibility of cancelling NAFTA. The USD/CAD was trading at C$1.24353, down 0.1228.