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USD/CAD 1.3200 Supporting Area In Check

Published 27/06/2017, 13:14
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The greenback is looking depressed ahead of the release of important US inflation data by the end of this week, While the markets are waiting today for Yellen's speech from London looking for new clues of the US monetary policy.

After The FOMC members maintained their median expectation of having another 0.25% hike by the end of this year.

The committee underscored its appreciation of the current inflation pressure, easing off ts released assessment.

The committee expected the inflation rate to continue to be in the short run below its 2% yearly inflation target, before stabilising around this rate over the medium term as it targets.

The committee expects the inflation rate to be at 1.6% this year, down from the 1.9% it expected in March. But it kept its forecast for 2018 at 2% yearly as the same as its median term inflation target, expecting the GDP annualised growth rate to be 2.2% this year, from the 2.1% it expected in March.

So, the release of April US PCE, which is the Fed's favourite gauge of inflation is expected to take much of the market attention by the end of this week, after it had shown a rise of only 1.7% yearly in March.

While US GDP final figure of the first quarter is expected to show annualised growth by 1.2%, the same as the second reading - after the shocking preliminary reading of it had shown previously growth by only 0.7%.

U.S. 10 year yields are now well below 2.15% at 2.13%, while EURUSD managed to stand well above 1.12 this morning, after ECB president Draghi said that the economic growth in EU is broadening, but the prudence in adjusting the monetary policy is still needed.

The sentiment in the European session is not running well: the European Commission imposed a $2.7bn fine against Google (NASDAQ:GOOGL), this was following a campaigned slide of equities in the HK market during the Asian session.

The markets during the US session are expected to be undermined by Brazilian president Tamer being charged with corruption, exposing Brazil to further political instability.

CAD is now underpinned by the oil prices rebound too, after it had been already boosted by rising odds of having sooner than later increasing of the borrowing costs in Canada.

After BoC senior deputy governor Wilkins' comment that economic growth continues to broaden, there will be assessing of all placed stimulus measurement to see if they are still needed.

USDCAD 1.3200 supporting area can be in check with persisting of this current market sentiment, while WTI is close but below $44 per barrel ahead of US EIA crude oil inventory release of the week ending on June 23.

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