FX Daily Update
The National Bank of Canada | Jul 07, 2016 09:52AM ET
Where does the Fed stand?
Yesterday, concerns about the fallout from Brexit resulted in a strong greenback in the morning until the release of the
minutes of the most recent Fed meeting took the wind out of the USD’s sails somewhat, to the extent that it closed
the day down slightly against the loonie. Some noteworthy highlights:
• The committee has become less optimistic about long-term growth
• No new information on the impact of Brexit on the U.S. economy
• Divergence in opinions regarding how to interpret the weak job report for May
What’s the take-home message? The May job report generated disagreement within the committee, giving even more
importance to the next U.S. job reading to be made available Friday morning. A substantial departure from
expectations could lead to major movement in the USD. It should be noted that in the current unstable climate, a
falling greenback can represent an excellent opportunity for buyers.
Today, we’ll be keeping an eye on another U.S. employment indicator, namely the ADP Employment Change survey.
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