​VBCE Daily Foreign Exchange Update for Thursday, June 16, 2016

USDCAD spot rate: 1.3030 - 1.3035 (as at 8:04am PST)

Ranges:

Asia:

1.2896

to

1.2945

Europe:

1.2919

to

1.2984

North America:

1.2980

to

1.3086

Technical Support / Resistance:

S2

S1

R1

R2

1.2882

1.2935

1.3086

1.3150

Key Economic Data Releases:

- U.S. Fed interest rate: unchanged @ 0.50% (as expected) https://www.federalreserve.gov/newsevents/press/monetary/20160615a.htm

- Bank of Japan interest rate: unchanged @ -0.10% (as expected)

- Bank of England interest rate: unchanged @ 0.50% (as expected)

- U.S. consumer price index m/m: 0.2% (exp. 0.3%) y/y: 1.0% (exp. 1.1%)

- U.S. CPI core m/m: 0.2% (exp. 0.2%) y/y: 2.2% (exp. 2.2%)

- U.S. initial jobless claims: 277k (exp. 270k)

- U.S. Philly Fed manufacturing: 4.7 (exp. 1.1)

Key Event Calendar:

Date

Canada

U.S.A.

June 17

Consumer price index

Housing starts, building permits

Yesterday, USDCAD initially climbed from 1.2825 up to 1.2935 before falling back towards 1.29 heading into the 11:00am U.S. Fed announcement. The initial reaction was a decline to 1.2870 on broad-based USD weakness. The Fed held rates noting that the "pace of improvement in the labor market has slowed while growth in economic activity appears to have picked up." They indicated that there would still be two interest rate hikes this year while knocking down their long-term view by a quarter point to 3%. Fed Chairman Yellen's following commentary was less dovish than expected sending the USDCAD back up towards session highs near 1.2930. CAD weakness was aided by a late market sell-off and the 5th consecutive day of declining oil prices. Overnight, USDCAD dipped to 1.2895 before rising to 1.2984 in the aftermath of the Bank of Japan announcement. Despite recent yen strength from risk aversion flows surrounding next week's Brexit vote and low inflation in Japan, the BOJ surprised markets by refraining from further easing measures. Japan's stock index plummeted 3% sending the JPY up over 3% towards a 4 year high vs. the CAD. USDCAD continued up to 1.3085 this morning before correcting down to 1.3020. Currently, the TSX and the DJIA are both down by about 0.65%. EURCAD is down 0.15% trading between 1.4516 and 1.4639. GBPCAD is unchanged trading between 1.8304 and 1.8421. JPYCAD is up 3.5% trading between 0.01218 and 0.01260. Gold is up 2% trading between $1,291 and $1,315USD/oz., silver is up 1.50% trading between $17.50 and $17.86USD/oz., while oil is down 3.23% trading between $46.19 and $47.72.

Sources: Reuters, Bloomberg, FXStreet, RBC Capital Markets, Bank of Canada, U.S. Federal Reserve, CNBC, Forexlive

083e3d7a6b

Follow us




Follow us on Twitter @vbcefx


Disclaimer


The information and opinions contained herein are gathered from sources which are thought to be reliable but the reader should not assume that the information and opinions are official or final. VBCE makes no warranty concerning the accuracy of the information and opinions, and accepts no liability for the consequences of any actions taken on the basis of the information and opinions provided. The content is for general information only and does not constitute in anyway giving financial advice.