The loonie flew south yesterday after the Bank of Canada opted not to raise key interest rates, as expected; they did, however, note that that less monetary stimulus will likely be required “over time”. According to the BoC, NAFTA renegotiations, the lack of inflationary pressure, geopolitical tensions and the debt of dynamic households are all factors leading the central bank to remain cautious. In light of this news, USD/CAD shot up over 1% to levels above 1.2800.
USD/CAD has remained relatively steady today, up ~0.15% to about 1.2815; Unemployment Claims data had minimal effect on the currency pair. Markets will look ahead to Pending Home Sales numbers out of the US at 10am EST for some possible movement.
The European Central Bank announced today that it would extend its tapering program, though at lower purchase amounts. Starting in January, the ECB will reduce monthly purchases from the current €60 billion to €30 billion and will extend those purchases to the end of September or beyond. The ECB has kept interest rates unchanged at a record low of 0.0% for the time being. EUR/CAD and EUR/USD are both down on the day since the announcement, at 1.5020 and 1.1716 respectively.
Crude oil prices dipped lower today as data from the US Energy Information Administration showed domestic crude stockpiles increased for the first time in five weeks. Crude inventories rose by 856K compared with analysts’ expectations for a decline of 2.6 million barrels. Brent Crude is currently trading at $58.07/barrel and WTI Crude is currently trading at $52.06/barrel.