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Bank of Canada Increases Interest Rate to 1%; Tensions with North Korea on the Rise
Published September 7, 2017
The Bank of Canada decided to raise it’s interest rate by 25 basis points yesterday, bringing it up to 1%. As such, the loonie surged more than 2 cents against the greenback. USDCAD hit 1.2140, the lowest the markets had seen since June of 2015. Markets will now be watching both economic data and a speech by BOC Govenor Stephen Poloz scheduled for September 27th in which he is expected to provide an economic update
If Canadian job data proves strong tomorrow morning (8:30am EST) the loonie could gain even more strength towards the psychological support level of 1.2000. Any indicators that would call into question the current pace of growth might result in a USDCAD rally
The European Central Bank left rates unchanged today, keeping the door open to increasing bond purchases. The ECB kept rates at their record lows, confirmed that asset buys would continue at 60 billion euros per month at least until December
China agreed today that the United Nations should take more action against North Korea after its latest nuclear test, while pushing for more dialogue to resolve the crisis on the Korean peninsula. North Korea says it will respond to any U.N. sanctions and U.S. pressure with powerful counter measures. The United States wants the U.N. Security Council to impose an oil embargo on North Korea, ban its exports of textiles and the hiring of North Korean labourers abroad
The U.S. Energy Information Administration will release its official weekly oil supplies report today at 11am EST. Analysts expect crude oil inventories rose by 4.1 million barrels at the end of last week. Brent Crude is up a quarter percent this morning sitting around 54.35 while WTI Crude is down about half a percent on the day at 48.92