- October 25, 2018
- Posted by: Joey Benedid
- Category: Market News
The ECB has kept their main refinancing rate unchanged at 0% and has targeted to do so through the summer of 2019. As this was in line with expectations the market has had little reaction as we await Draghi’s news conference at 8:30 AM EST. The dollar index remains buoyant after its recent surge higher but has not made any further traction as we await U.S. durable goods orders also due out at 8:30 AM EST. Friday’s U.S. GDP release is the next major release so players will take their cue from global equities until then.
The BOC did as expected and raised rates by a quarter point yesterday but the accompanying MPR was the main star. The Bank delivered a decidedly hawkish outlook despite a global equity meltdown and trade tensions remaining high. While they mentioned the current rate as still being accommodative and a desire for a return to neutral levels, they also maintained there is no set path for rates, and they will remain data dependent. We managed to push below 1.3000 but have since drifted half a cent higher as market sentiment remains USD bullish in the broader scheme of things. While CAD is likely to fare well against the crosses we may struggle to make greater gains against the USD in the short term. I would look for us to settle into a new range with targets on the downside being 1.2920-50 and topside resistance coming in at 1.3050-80.