FX Daily Update
The National Bank of Canada | Feb 11, 2016 11:59PM ET
Yellen opens the door to a break in rate hikes
The loonie lost ground Wednesday and the reason why is certainly no mystery. Oil continues to plunge, having now lost 11.5% since the start of the week to end up at $27.33 yesterday. U.S. Crude Oil Inventories published yesterday confirmed that the glut on the market persists.
In other news, Fed Chair Janet Yellen admitted during her testimony to Congress yesterday that the recent turbulence on markets and risks related to China could have a detrimental impact on the U.S. economy. We can infer from these remarks that the Fed will hold off on raising its key rate in the coming months, a scenario that is in keeping with the outlook of our Chief Economist and Strategist, who expects rate hikes to be interrupted in 2016 with a gradual slide in the USD over the year.
This morning, we’ll be looking at red screens once again with crude oil and stock markets down and a loonie hovering close to 1.4000. Note also that Sweden cut its key rate still further into negative territory. Lastly, at 8:30 we’ll get a look at Jobless Claims south of the border.
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