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NBC Daily Forex : August 07, 2013

ByThe National Bank of Canada
Published 08/08/2013, 03:44 AM
Updated 05/14/2017, 06:45 AM

Earlier this morning, former Bank of Canada Governor Mark Carney, who now heads the Bank of England, opted to take a page out of the Fed's playbook by linking the next interest rate hike to economic indicators. The BoE's Quarterly Inflation Report released this morning stated that interest rates would remain low and quantitative easing measures would remain in place at least until unemployment falls below 7%; a level not seen since February 2009. This could take some time, given the current reading of 7.8%. Because the tone of the report was less gloomy than markets had anticipated, investors took the opportunity to reverse their sell positions on the pound sterling. The GBP has gained more than 150 points against the greenback since 5 a.m., regaining the ground it had lost since the end of July.

Meanwhile the loonie has dropped against its neighbour to the south this morning, and the trend could worsen if Building Permits and the Ivey Purchasing Managers Index, which are both released this morning, fail to meet expectations. Wishing you a great day! Gardy Pharel

Range of the day: 1.0350 -1.0460

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