Canadian dollar little changed ahead of BOC decision
The Swiss franc was little moved against the USD after a report said that the Swiss National Bank (SNB) has made a huge loss in 2017. The bank made a loss of more than $15 billion a year after it made a huge profit of more than $50 billion. The bank blamed the loss to the volatile global market that affected its international holdings and a stronger franc. A good number of stocks that the bank owns declined sharply as the year came to an end. Its portfolio includes stakes in companies like Apple and Microsoft. Today, inflation data from Switzerland showed that the CPI in December increased by 0.7%, which was lower than the expected 0.8%.
The price of crude oil rose sharply as investors grew increasingly optimistic about a deal between the US and China. The price was also influenced by the API report that showed falling US inventories. In the past week, the report showed that inventories declined by more than 6.5 million barrels. Later today, EIA will release its report on inventories. Traders expect the data to show that inventories declined by 2.6 million barrels.
The Canadian dollar was little moved today ahead of the monetary policy statement by the BOC. The bank is expected to leave rates unchanged at 1.75% although analysts are differing on the way forward. Analysts at Blackrock estimate that the bank could leave rates unchanged for the year while those at Morgan Stanley expect the bank to surprise the market with a hawkish statement. Meanwhile, ahead of the interest rates decision, the country released positive housing starts numbers for December. Starts rose by 213K, which was higher than the expected 210K.
World markets continued to advance today after trade talks advanced in Beijing. At the same time, there are worries that the continued government shutdown will have bigger effects than investors were expecting. Fitch announced that it could downgrade US bonds in a move that would reverberate across the market.
The EUR/USD pair was slightly volatile today as traders waited for the Fed minutes. After rising to a high of 1.1480, the pair dropped towards the opening price of 1.1440. In the past two days, the pair has been consolidating within these levels. On the hourly chart, the pair’s price is moving from one band of the Bollinger Bands to another with the RSI staying firm along the 50 level. There is a likelihood that major upward or downward moves will happen later today during the American session.
The USD/CAD pair remained at significant lows as traders waited for a decision by the Bank of Canada. The pair attempted to move up but found some resistance along the 21-day EMA. The current price is below the 42-day EMA while the RSI has moved from the oversold level of 30 to the current 37. The same is true with the money flow index that has continued to move up. The pair’s next trend will be confirmed today by the statement released by BOC.
The price of Brent crude oil jumped today, continuing a trend that started early this year. It reached the important level of $60, which is the highest level in four weeks. On the four-hour chart, the price is currently above the 21 and 42-day EMA. It is also slightly above the 23.6% Fibonacci Retracement level while the RSI remains at overbought levels. The direction could change today depending on the official inventory numbers by EIA.