The Canadian dollar fell on Wednesday after the Bank of Canada (BOC) and oil prices were waiting for a fall. BOC kept its benchmark interest rate unchanged at 1.00 percent. The central bank has indicated a strong job growth and rising inflation that the next step rate may increase, but the timing of monetary policy decisions can be in the air. The fate of the NAFTA negotiation is still uncertain and with such a large part of the economy tied to the result, it will speculate sometime before BOC for its BOC, but there will be a lot of factors on its mandate.
It has been acknowledged by the statement given by BOC that high rates will be required over time, but their commitment to caution was taught from the market and Luni paid the price. In the third quarter the Canadian economy has slowed down, but in the third quarter there is still a growth of 1.7% in the GDP, but with the growing headwinds NAFTA and OPEC's delicate production cut, Governor Poloz Has kept his options until a decision is made, until it becomes more unknown, open until then. The most likely of analysts is that NAFTA will continue, even if a regeneration does not do meaningful results and oil prices will remain on the front, which will leave the BOC decision to rely on fundamental data.
American tax reform remains optimistic as Congress and the Senate will work in collaboration with two previously passed editions. The geopolitics are a big driver of market sentiment, the Trump administration is finally close to winning since so many past failures.
USD / CAD received 0.80 percent on Wednesday. After the Bank of Canada (BOC) rates are kept unchanged at 1.00 percent after doing business at 1.2787 and it is informed that it will be cautious going forward. US private employers dropped the publication of the first ADP Personal Payroll Report, which will be released this week, on Friday. On the way to non-agricultural wages (NFP), added 1,900 jobs compared to expected, with the possibility of adding 198,000 jobs in November.
BOC's decision to keep the benchmark rate at 1.00 percent and their language reflected due to declining growth prospects in the January meeting. After the statement was released, the probability decreased from 41 percent to 26. There is not much for the remainder of the week in Canada's financial calendar.
On Thursday, the Building Permit and Purchasing Managers' Index (PMI) will be highlighted, but most of the market movements emphasize the development of wage before the US Federal Reserve with monetary activity from geopolitics (Washington and Brecht's development) and US employment data. Will emphasize Policy meeting next week.
Oil prices have declined by 3 percent in the last 24 hours. Energy Information Administration (EIA), after confirming the API number after weekly inventory data, West Texas Intermediate is trading at 55.84. Crude stock fell more than expected to 5.6 million barrels, but gasoline inventory rose for 6.8 million barrels.
Which indicated to the market that demand for energy cannot be consistent with estimates. Despite the seasonal increase in gasoline inventions, data indicates more than average deposits over the last five years.
With the meeting of the Petroleum Exporting Countries (OPEC) meeting in Rearview, the softening of energy demand in the US has led to a decline in prices. Between the growing American production and the coordinated efforts of OPEC and other major producers, the showdown will continue till 2018 because the prices are more stable, but there is a danger of negative aspects if there is no improvement in global hunger for black goods.
