CAD holds firm ahead of BoC rate decision

Key Movers

The US Dollar Index (DXY) traded steady this morning around the 102.870 levels. The dollar has remained flat as markets await the release of the Purchasing Manager’s Index (PMI) data set to be released on Wednesday. Wednesday’s PMI surveys are both expected to decline, although the wider growth picture comes into play on Thursday with the release of the fourth quarter Gross Domestic Product (GDP) data. Markets will also be anticipating Friday’s core Personal Consumption Expenditure (PCE) inflation gauge. In data today, the Conference Board Inc. released their leading index showing a better-than-expected monthly result at 0.3% growth versus the previous -0.5% dip at -0.1%

In the Eurozone, the EUR held its stance in the 1.09 area against the USD this morning ahead of the European Central Bank (ECB) policy statement on Thursday. Dutch consumer confidence data showed a slight increase at -28 versus the previous -29 reading. This is the 6th consecutive improvement in consumer confidence in the Netherlands.

In Asia markets, China’s 1-year loan prime rate stayed the same at 3.45%. The 5-year rate also remained stable at 4.2%. The JPY held steady this morning ahead of the Bank of Japan’s (BoJ) policy decision tomorrow.

The UK market is expecting inflation to outweigh slowing retail sales when the Bank of England (BoE) makes its next interest rate decision. The pound finished last week slightly stronger than the EUR for the fourth consecutive week.