Euro Hovers Near 3-Year Highs; Softer Greenback Sends Precious Metals Higher
Published January 15, 2018
In observance of Martin Luther King Day, all US banks will be closed today.
The euro held at three-year highs against the US dollar today after last week’s surge, its rise fueled by growing expectations that the European Central Bank will tighten monetary policy. The euro has also gained more than 3 cents against the loonie since January 9th.
Prices of precious and base metals started the week strongly, rising across the board thanks to a potent combination of a softer dollar and a robust outlook for demand.
Oil hovered below a three-year high near $70 a barrel today on signs that production cuts by OPEC and Russia are tightening supplies, but analysts warned of “red flags” due to surging US shale production. A production-cutting pact between the Organization of the Petroleum Exporting Countries, Russia and other producers has given a strong tailwind to oil prices, with both benchmarks last week hitting levels not seen since December 2014.
The key event for Canada this week is the interest rate decision and policy statement by the Bank of Canada on Wednesday. The market is pricing in a 90% chance of a quarter percent interest rate hike. There is always the outside chance of surprise from Poloz, but assuming they do raise rates, focus will be on outlook for future expectations.