Daily Update - 17th January 2018
On Tuesday, U.K Inflation Data Hits Target via CPI, Euro & Pound Remain Calm with Consumer Price Index data from the U.K met its target a little while ago, while other inflation data was essentially mixed. However, the Home Price Index reading did show a strong jump to 5.1% for the past year. Tomorrow the European Union will release its own inflation numbers. The Pound and Euro have maintained their higher values against the U.S Dollar yesterday. Bank of Canada rate decision is the main focus today. After strings of strong economic data, BoC is generally expected to hike interest rate by 25bps to 1.25%. That will be the third hikes of the current tightening cycle. Canadian Dollar stays in range trading (started since January 5) as traders are awaiting the rate decision. The loonie struggled to follow others to extend gain against the greenback since last week, even though WTI crude oil extended up trend to just inch below 65 handle. An explanation is that some traders are cautious on the chance of a "hawkish hold" by BoC today. That is, while BoC also expects itself to raise interest rate in Q1, it wait until March to do so. In that case, we'd probably see more range trading in USD/CAD above 1.2354. Nonetheless, we're still a high chance of powering through 1.2354 support should BoC delivers the rate hike. Elsewher, Eurozone CPI final is the main feature in European session. US will release industrial production, NAHB housing index and Fed's Beige Book economic report later today. Yesterday’s Focus
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