Mark Carney had promised that the Bank of England would be more transparent regarding its intentions and would reveal the votes and projections of its members. As such, we learned this morning that eight out of nine members of its Monetary Policy Committee voted in favour of keeping the country's key rate unchanged, deeming that inflation risk was modest and that the impact of the drop in oil prices would continue to be felt until mid-2016. The GBP emerged a big loser after the announcement, dropping close to -0.75% against the CAD and USD.
Yesterday, Canadian International Merchandise Trade came in much better than expected, not only because the deficit was less substantial than observers had forecast, but also due to gains made by a broad range of exporters. However, it is unlikely that this development was sufficient to keep the Canadian economy from contracting for a second quarter in a row.
Today, we'll be keeping an eye on Initial Jobless Claims south of the border while we await tomorrow's U.S. labour market data, which will serve as a market barometer to predict whether the Fed will raise its key rate in September.
- Range of the day: 1.3125 - 1.3250
Have a great day!
Salim Laaroussi