Bank of Canada Prepares to Hike | US Escalates Trade War Tensions
Published July 11, 2018
The Bank of Canada is set to release its latest decision at 10 am EST in Ottawa, with the most probable policy being a raise in the overnight interest rate, currently at 1.25% for a fourth time in 12 months to keep inflation under control. The Bank of Canada has demonstrated that future hikes will be gradual because of the recent trade upheaval as markets are placing the highest odds on this scenario.
The Trump Administration pushed ahead with plans to impose tariffs on additional $200 billion in Chinese products by releasing a list of targets, marking a sharp escalation in a trade war between the world’s two largest economies. The tariffs could take effect after public consultations end on August 30th, according to a statement from the US Trade Representative’s office.
As he prepared to sit down for NATO’s annual summit in Brussels on this morning, President Trump complained that German imports of Russian oil and natural gas make Angela Merkel’s nation “a captive of Russia.”
EUR/USD tested at 1.1700 levels as the US dollar catches fresh bids against its major rivals, following the US PPI release. The risk-off sentiment seen in European markets amid escalating US-China trade tensions prompt investors to seek safety in the world’s reserve currency.