News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9Flsqcxo9 https://t.co/ltVTNO2sjT
  • GBP/USD clears the May low (1.3801) as the Federal Reserve forecasts two rate hikes for 2023. Get your $GBP market update from @DavidJSong here:https://t.co/WdTG2niAKz https://t.co/2j02VyH0wm
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.01% 🇪🇺EUR: -0.36% 🇨🇭CHF: -0.60% 🇨🇦CAD: -0.91% 🇦🇺AUD: -0.96% 🇳🇿NZD: -1.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/HWVSmqaiYF
  • The amount of breakouts the #USD saw against its major peers this week was fairly impressive Lots of opportunities here for reversing dominant downtrends that have been prevailing for about 14-15 months Stay tuned for my USD weekly technical outlook coming out this weekend!
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.19% Silver: -0.41% Gold: -0.57% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/J6vFrm0Psb
  • Post-Fed, plunging commodity prices are weighing down growth-sensitive currencies like the Canadian Dollar. Get your market update from @CVecchioFX here:https://t.co/RwM9qu0Zjv https://t.co/u6WFpqfcdZ
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Gold are long at 85.22%, while traders in France 40 are at opposite extremes with 70.57%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/O3dA4qOEid
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: France 40: 0.14% FTSE 100: 0.09% Germany 30: 0.06% Wall Street: -0.02% US 500: -0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/MFEjkHP34f
  • Fed's Kashkari: Maximum employment means at the very least back to pre-COVID levels of employment
  • Fed's Kashkari: - I am opposed to rate hikes at least through 2023 - The labor market is still in a deep hole; it will take some time to get people reattached to the work force
UPDATE: USD/CAD Reverses Losses as BOC Reveals Dovish Intentions

UPDATE: USD/CAD Reverses Losses as BOC Reveals Dovish Intentions

Christopher Vecchio, CFA, Senior Strategist

Update (10/19/16 at 15:40 GMT)

Bank of Canada Stephen Poloz is speaking at the post-rate decision press conference and has unleashed a wave of dovish commentary that has pushed back against post-decision CAD strength.

Of note, BOC Governor Poloz said, "Given the downgrade to our outlook, Governing Council actively discussed the possibility of adding more monetary stimulus at this time..." It would then appear that the market was underpricing the possibility of a rate cut substantially, with overnight index swaps only pricing in a 1.9% chance of a 25-bps rate cut today (Governor Poloz's comments would indicate it was a lot closer than that).

Here's how USD/CAD is reacting between the rate decision release and the Poloz press conference:

Chart 2: USD/CAD 1-minute Chart (October 19, 2016 Intraday)

UPDATE: USD/CAD Reverses Losses as BOC Reveals Dovish Intentions

Talking Points: (Originally posted on 10/19/16 at 14:34 GMT)

- Bank of Canada cuts 2016, 2017 CPI and GDP forecasts; cuts weren’t as deep as markets expected.

- USD/CAD dives from near C$1.3110 to near C$1.3030 in minutes after rate decision.

- See the DailyFX Economic Calendar for Wednesday, October 19, 2016.

The Bank of Canada’s rate decision has produced a little bit more excitement than markets may have been anticipating ahead of time, sending USD/CAD to fresh session lows on the day. As expected, the BOC kept its main rate on hold at 0.50%. Although interest rate markets weren’t pricing in any expectation of action one way or the other – there was a 98.1% chance of a hold and a 1.9% chance of a 25-bps, according to overnight index swaps – conversation among market participants and economists beforehand differed. The question among market observers was: to what degree will the Bank of Canada downgrade its economic forecasts?

Or, as Currency Analyst James Stanley aptly put it, “How Dovish Might the Bank of Canada’s Forecasts Be?” As it turns out, the Bank of Canada’s downgrades to its CPI and GDP estimates, in conjunction with its observations on the Canadian economy and financial climate, were still more optimistic than market participants were expecting, as evidenced by the turn lower in USD/CAD.

Despite the CPI and GDP downgrades (see below for details), the Bank of Canada in its policy statement said, “After incorporating these weaker elements, Canada’s economy is still expected to grow at a rate above potential starting in the second half of 2016…the Bank considers the risks around its update inflation outlook to be roughly balanced, albeit in a context of heightened uncertainty. Meanwhile the new housing measures should mitigate the risks to the financial system over time.” This is a hawkish tone in what appears to be a superficially dovish statement.

Here are the 2016 and 2017 CPI and GDP forecast that the Bank of Canada downgraded today:

  • 2016 CPI: +1.5% (from +1.6%) | 2016 GDP: +1.1% (from +1.3%)
  • 2017 CPI: +1.9% (from +2.1%) | 2017 GDP: +2% (from +2.2%)

See the DailyFX economic calendar for Wednesday, October 19, 2016

Chart 1: USD/CAD 1-minute Chart (October 19, 2016 Intraday)

UPDATE: USD/CAD Reverses Losses as BOC Reveals Dovish Intentions

Following the release of the rate decision and policy statement, USD/CAD immediately traded lower from C$1.3112 to as low as C$1.3028 at the time this report was written.

Read more: Watch Oil’s Next Move (Implications for USD/CAD)

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES