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NBC Daily Forex: May 03, 2013

ByThe National Bank of Canada
Published 05/03/2013, 06:07 AM
Updated 05/14/2017, 06:45 AM

After much anticipation, the European Central Bank reduced its key rate by a quarter point from 0.75% to 0.50%. President Mario Draghi also renewed the ECB's commitment to provide unlimited liquidity to banks until mid 2014. When questioned on the subject of potential negative interest rates for bank deposits, he stated he was keeping "an open mind" about the subject, with the objective being to encourage banks to lend out their funds rather than deposit them with the ECB. The signal is clear: The ECB is determined to roll back the tide. The euro declined moderately after the announcement, but its movement could continue.

This morning, the jobs situation south of the border is first and foremost in investors' minds. Expectations are rather low at 140K, so the potential exists for a surprise while markets are still mulling over the decisions and comments from the Fed and the ECB. Positive jobs figures would be favourable to the loonie.

The Bank of Canada nominated its new Governor, yesterday evening. Stephen S. Poloz was, until recently, president and CEO of Export Development Canada and will take charge on June 1, 2013. His sensibility to the reality of Canadian exporters has pushed the loonie down overnight. Benoit Marcoux

Range of the day : 1.0050-1.0160

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