3 Dec 2014
EUR/CAD extending the downside amid weak EUR and hawkish BoC
FXStreet (Guatemala) - EUR/CAD is trading at 1.3994, down -0.80% on the day, having posted a daily high at 1.4136 and low at 1.3977.
EUR/CAD has been moving to the downside breaking below the sideways channel on the back of oil picking up off its lows, weaker EZ data coming in again (EUR at two year lows while the greenback scored its highest level against a basket of six major currencies in the DXY since 2009) and also the BoC seeing signs of a recovery while the output gap is appearing to be smaller than last projected back in October.
On this basis, the BoC opted at keeping their interest rates at 1.00%, as expected, while inflation has been higher than expected and came across slightly more hawkish than expected. However, there was monition of lower oil and commodity prices weighing on the economy and that is something that needs to be balanced up now in respect of current signs of growth for 2015.
From Europe, we are focused on the ECB tomorrow and each and every data count that is coming in negative is pointing toward certainty of action in early 2015 from the ECB who have already been voicing a “need” for easing measures and officials even offering examples of how they will tackle the concerns for their inflation target which all point towards a weaker euro in 2015.
Macro developments are in the list of announcements in the ECB’s meeting tomorrow and markets are geared for a highly dovish tone from the Central Bank. Today, retail sales for November month on month disappointed in the EZ while German Markit PMI Services was in line with expectation but down 0.3% from previous and EZ’s came I 0.2% below consensus as well. These figures add to the disappointing economic indicators from the Euro-bloc and have continued to stoke concerns amongst investors and global markets about the threat of deflation in the Eurozone amid weak global growth elsewhere
EUR/CAD has been moving to the downside breaking below the sideways channel on the back of oil picking up off its lows, weaker EZ data coming in again (EUR at two year lows while the greenback scored its highest level against a basket of six major currencies in the DXY since 2009) and also the BoC seeing signs of a recovery while the output gap is appearing to be smaller than last projected back in October.
On this basis, the BoC opted at keeping their interest rates at 1.00%, as expected, while inflation has been higher than expected and came across slightly more hawkish than expected. However, there was monition of lower oil and commodity prices weighing on the economy and that is something that needs to be balanced up now in respect of current signs of growth for 2015.
From Europe, we are focused on the ECB tomorrow and each and every data count that is coming in negative is pointing toward certainty of action in early 2015 from the ECB who have already been voicing a “need” for easing measures and officials even offering examples of how they will tackle the concerns for their inflation target which all point towards a weaker euro in 2015.
Macro developments are in the list of announcements in the ECB’s meeting tomorrow and markets are geared for a highly dovish tone from the Central Bank. Today, retail sales for November month on month disappointed in the EZ while German Markit PMI Services was in line with expectation but down 0.3% from previous and EZ’s came I 0.2% below consensus as well. These figures add to the disappointing economic indicators from the Euro-bloc and have continued to stoke concerns amongst investors and global markets about the threat of deflation in the Eurozone amid weak global growth elsewhere