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NBC Daily Forex : July 05, 2013

ByThe National Bank of Canada
Published 07/07/2013, 05:34 AM
Updated 05/14/2017, 06:45 AM

Fearing a generalized surge in interest rates stemming from the pending adjustments to monetary policy in the U.S., the European Central Bank and the Bank of England opted to modify their approach. For the first time yesterday, the ECB revealed its game plan to investors by announcing that it would keep rates low for an extended period, following in the footsteps of the approach just announced by new Bank of England Governor Mark Carney. This open, typically North American management style, is a hallmark of Carney, the former Bank of Canada Governor. The two currencies concerned both lost ground against the USD in the wake of these announcements.

The increase in rates, which are now at a 2-year high south of the border, is starting to have an impact, with mortgage applications down 12%.

The greenback is therefore in a position of strength at present, and Job Creation figures to be announced this morning could trigger a great deal of movement. Some 165,000 new positions are expected, along with a 0.1% dip in the unemployment rate to 7.5%. In Canada, a sharp setback is anticipated, following last month’s +95K jobs creation. The situation bears monitoring closely and most importantly, avoids leaving on vacation without talking to your trader to put in place appropriate orders for your situation! Benoit marcoux

Range of the day : 1.0475-1.0600
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