Canadian dollar wavers ahead of the BOC interest rate decision
The price of crude oil is wavering today after the American Petroleum Institute (API) released last week’s inventories data. The report said that US inventories rose by 1.4 million barrels after rising by 4.16 million in the previous week. Economists polled by Reuters were expecting the data to show that the inventories fell by more than 1.5 million barrels. Later today, we will receive the official inventories data from the Energy Information Administration (EIA). The data comes a week after OPEC decided to boost production by more than 500k barrels a day starting from January.
The Canadian dollar fell slightly against the USD ahead of the important interest rate decision by the Bank of Canada. Economists believe that the central bank will leave its policy tools unchanged as the country’s economy continues its recovery process. This will include leaving the main interest rate unchanged at 0.25%. They also believe that the bank will continue tapering its asset purchases to possibly below c$4 billion per week. The rate decision will come at a time when the Canadian economy is recovering, supported by relatively higher oil prices.
The Japanese yen is little changed against the US dollar after the country released strong machinery orders. In a report by the statistics office, the core machinery orders rose by 17.1% in October after dropping by 4.4% in the previous month. This increase was better than the consensus estimate of 2.8%. It also led to an annual increase of 2.8%. These numbers came a day after data from the office showed that the country’s economy bounced back in the third quarter.
The EUR/USD pair is little changed and is trading at 1.2115, which is in the same range as yesterday. On the hourly chart, this price is at the same level as the 14-period and 28-period exponential moving averages. It is also between the important support at 1.2080 and the YTD high of 1.2177 while the Chaikin oscillator has moved above the neutral level. For today, the pair will likely remain at the current range as traders wait for the ECB interest rate decision.
The GBP/USD is little changed today as traders continue to focus on Brexit. It is trading at 1.3368 where it has been in the past two days. This price is also at the same level as the ascending yellow trendline. The average true range has risen while the price is on the same level as the 14-period and 28-period moving averages. The Triple exponential moving averages has also dropped. Therefore, the pair will likely remain at the current range as traders wait for an outcome on Brexit.
The USD/CAD pair is trading at 1.2809, which is slightly above this week’s low of 1.2769. On the four-hour chart, the price is significantly below the short and medium-term moving averages. The RSI has also moved from the oversold level of 28 to the current 40. The Average True Range (ATR) is also at the lower side, which could be a calm before the storm ahead of the BOC decision.