• Is the Euro Overvalued? • Will the Bank of England Minutes Crush the British Pound?
EURUSD dropped to within a few points of the 1.5700 barrier for the first time in nearly two weeks
On Tuesday, the Canadian dollar tumbled versus the US dollar for a variety of reasons, including a drop in the price of oil, disappointing Canadian retail sales, and hawkish comments by a Fed official. Meanwhile, USD/CAD faces additional event risk on Wednesday from the release of Canadian CPI. How will it impact the pair, and more importantly, will it help or hurt the case for price to rally toward 1.08?
The BoE voted 7-1-1 to keep their benchmark rate unchanged at 5.00%, with Tim Besley calling for a rate hike and David Blanchflower a cut. The MPC stated that the path of inflation would likely be higher than forecasted and that the housing downturn has gathered momentum and the slowdown to growth was more pronounced than forecasted. The committee chose to leave the rate unchanged to send a strong message on inflation with Besley calling for the central bank to anchor inflation to ensure credibility.
Technical Currency Analyst
The expected drop below 1.5783 has occurred and we expect the EURUSD to form a low before 1.5611 and head higher, possibly to all-time highs.