CAD dips against counterparts ahead of rate decisions

Key Movers

The US Dollar Index (DXY) was up this morning to trade at 104.21 at the time of writing. This lift came on the tailwinds of strong US labour data released on Friday and ahead of the final rate decision of 2023 on Wednesday. Markets anticipate that the Federal Reserve is likely to hold rates at 5.5%, but the decision will likely be influenced by Consumer Price Index (CPI) data which is set to be released tomorrow.

In the UK, the Rightmove House Price Index was released at -1.9%, a dip from the previous -1.7% level. Rate announcements are also expected out in the UK and Eurozone this week with the final decisions of 2023 for the Bank of England (BoE) and European Central Bank (ECB) due for release on Thursday. Markets expect no changes in either rate decisions with the BoE expected to stay at 15-year high of 5.25%.

Deepening deflation in China has caused consumer prices to fall at the fastest in 3 years. CPI, both year-over-year and month-over-month, was -0.5%. Dipping below the previous -0.2% year-over-year and -0.1% month-over-month.

In Japan, the JPY slid downward against most other major counterparts as report indicated that the Bank of Japan (BoJ) is not expected to end negative interest rates in December.