Bank of Canada expected to hike rates
Daily Currency Update
The CAD is slightly down against the USD at the time of writing to the 1.32964 level. The CAD looks on course for gains as the Bank of Canada (BoC) is expected to hike rates again this month. The BoC is expected to announce a second consecutive quarter-point interest rate hike on Wednesday after a month of economic data revealed resilient growth and a tight labor market. The total monthly value of building permits in Canada was released, showing an increase of 10.5% in May to $10.5 billion. The total monthly value of residential permits rose 8.5% to $6.8 billion in May, with Ontario contributing to 45.8% of Canada’s residential permit values. In oil news, crude oil prices are dropping slightly, selling at $73.25 a barrel. Expected crude supply cuts from Saudi Arabia and Russia limited losses.Key Movers
On Sunday, the Bank of England’s (BoE) Governor Andrew Bailey rejected the call to raise the inflation target higher than 2%, warning that changing the goal could damage the bank’s credibility.In July, the sentix economic index for the Eurozone fell for the third time in a row. At -22.5 points, the figure indicates a negative outlook for Euro economic conditions for the next six months. It is at its lowest level since November 2022.
This morning the dollar index (DXY) made slight gains back from Friday’s low of 102.22, rising to 102.5. Friday’s US jobs data showed the economy added 209,000 jobs last month. This marks the smallest increase in almost three years and the first time in 15 months that payrolls missed expectations, sending the dollar tumbling. Final Wholesale Inventories reported no movement month-over-month versus the expected -0.1% dip. No change in the value of goods held in inventory by wholesalers indicates a lower likelihood of suppliers making new purchases.
The China Consumer Price Index (CPI) for June reported no change year-over-year versus the expected 0.2% increase. The Producer Price Index (PPI) dipped -5.4% year-over-year in contrast to the expected -5% dip. Both figures indicate weak demand in China, both dropping from the May figures.
Expected Ranges
- EUR/CAD: 1.45377 - 1.45729 ▲
- GBP/CAD: 1.69618 - 1.70487 ▼
- AUD/CAD: 0.88159 - 0.88891 ▼
- USD/CAD: 1.32661 - 1.33031 ▲