CAD bounce shortened

Swissquote Bank Research Team Swissquote Bank Ltd

Following January’s Bank of Canada’s (BoC) meeting, which decided to maintain its key rate at 1.75% for the second consecutive time, the loonie is holding up against the greenback. Under current settings, we expect the Canadian economy to stay robust and the BoC possibly to hike its rate by December 2019. USD/CAD’s drop from yesterday might be over, as optimism for resolution of the Sino-American trade dispute builds. However, risk of a US government shutdown by Saturday looms. Currently trading at 1.3225, USD/CAD is heading along 1.3255 short-term.

Canada’s GDP growth is now projected at 1.70% from a prior 2.10%. Inflation remains consistent, with December headline and core consumer prices at 2% and 2.30% (prior figures: 1.70%). The labour outlook remains highly constructive. Hourly earnings have taken off since a November 2018 downtrend, up 1.80% in January while the economy built 67,000 jobs in the same period. The recent bounce in oil prices from December is good for Canada’s trade balance. It benefits from OPEC’s price hike and Saudi Arabia’s output cut, but also from USA’s oil import sanction against Venezuela, as US refiners are willing to substitute it with Canadian heavy crude.

Stay on top of the markets with Swissquote’s News & Analysis

Author

Swissquote Bank Research Team

Swissquote Bank Ltd

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.