Greenback Returns With A Vengeance
The National Bank of Canada | Feb 21, 2017 08:48AM ET
Yesterday was particularly calm on financial markets, with holidays in the United States and certain Canadian provinces. U.S. stock markets and the Toronto Stock Exchange were closed. European markets, which also saw low trading volumes, mainly treaded water. The USD/CAD pair also failed to show movement yesterday, fluctuating within a relatively narrow band.
This morning, the U.S. dollar is back with a vengeance, posting gains against the other major currencies. Among the forces driving the USD upward are comments by a Federal Reserve member that the possibility of a rate hike in March cannot be ruled out. Markets are pricing the chance of such an occurrence at 36%. An increase in June appears the most plausible scenario according to markets and our economists.
Today, the action picks up again with the release of the Markit U.S. Manufacturing PMI for February 2017. Once again, economists surveyed on the subject expect an improvement, which would represent the sixth straight monthly gain.
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