- The Bank of Canada held a policy meeting yesterday at which it kept the interest rate at 5.00% but warned that further hikes were possible due to the fact that inflation has not sufficiently cooled. This was seen as mildly hawkish overall, although the Canadian Dollar barely reacted to the news.
- WTI Crude Oil dipped a little yesterday after recently reaching a new multi-month high price, as Saudi Arabia and Russia confirmed they will continue supply curbs until the end of 2023.
- In the Forex market, the USD/JPY currency pair advanced again yesterday to a new 10-month high above ¥148.75 before selling off somewhat. Yesterday, Japan’s top currency diplomat Kanda stated that FX movements were being monitored with urgency while all options remained on the table – a threat of central bank intervention again the continuing weakening of the Japanese Yen. There is a real fear of market intervention by the Bank of Japan if the Yen keeps depreciating.
- The US Dollar remains strong, with the Dollar Index reaching its highest price yesterday in more than 4 months.
- Bitcoin is threatening to break down to new 2-month lows as the crypto sector remains somewhat weak.
- Yesterday saw the release of stronger than expected US ISM Services PMI data which may have assisted yesterday’s gains by the US Dollar, by increasing the perception that the Fed may hike again.
- There will be a release later today of US Unemployment Claims.
Forex Today: Bank of Canada Makes ‘Hawkish Hold’
Adam Lemon
The Bank of Canada left its interest rate on hold at 5.00% but warned that persisting inflationary pressures might force further hikes.