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8 Jan 2014
USD/CAD climbs ahead of Fed minutes, Canadian inflation concerns continue
FXstreet.com (London) - USD/CAD has climbed to CAD1.0807 ahead of the release of the ADP employment report for December at 13:15 GMT and the release of the FOMC minutes from the Fed’s December meeting.
Canadian inflation concerns
There is little in the way of Canadian data in play today and instead any movement on the CAD side will be from continuing Canadian inflation concerns with inflation currently running at 0.9 percent, far short of the Bank of Canada’s 2 percent inflation target. Speaking on Canadian television yesterday, BoC governor Stephen Poloz said: “I would say I'm most worried about inflation and how it's underperforming. It's a difficult one to explain right now; that always makes you worry,”
Key US jobs data
December ADP employment numbers are expected to fall 15k short of November’s 215k print, with Friday’s non-farm payroll number more in focus. The Fed moved to cut is monthly asset purchase programme by USD10bn on 18 December, but it will be looking for solid jobs figures to help vindicate its decision to remove some support from the US economy.
The biggest focus on the FOMC minutes released at 19:00 GMT will be on any proposed measures to replace QE. Janet Yellen, confirmed by the US Senate this week as the successor to Ben Bernanke when he stands down from the chairmanship of the Fed on 31 January, has been perhaps the biggest proponent of forward-guidance at the Fed and for increased Fed transparency.
However, The forward guidance issued with the Fed’s December decision thin on the ground - to keep rates lower well past the time that the unemployment rate declines below 6.5 percent. The minutes will be scrutinised for clues as to how the Fed will move to draw down rates if they begin to rise too quickly for the US economic recovery.
USD/CAD down on session high
USD/CAD has climbed to CAD1.0807, up 0.39 percent on the day, falling slightly from a session high of CAD1.0831.
Canadian inflation concerns
There is little in the way of Canadian data in play today and instead any movement on the CAD side will be from continuing Canadian inflation concerns with inflation currently running at 0.9 percent, far short of the Bank of Canada’s 2 percent inflation target. Speaking on Canadian television yesterday, BoC governor Stephen Poloz said: “I would say I'm most worried about inflation and how it's underperforming. It's a difficult one to explain right now; that always makes you worry,”
Key US jobs data
December ADP employment numbers are expected to fall 15k short of November’s 215k print, with Friday’s non-farm payroll number more in focus. The Fed moved to cut is monthly asset purchase programme by USD10bn on 18 December, but it will be looking for solid jobs figures to help vindicate its decision to remove some support from the US economy.
The biggest focus on the FOMC minutes released at 19:00 GMT will be on any proposed measures to replace QE. Janet Yellen, confirmed by the US Senate this week as the successor to Ben Bernanke when he stands down from the chairmanship of the Fed on 31 January, has been perhaps the biggest proponent of forward-guidance at the Fed and for increased Fed transparency.
However, The forward guidance issued with the Fed’s December decision thin on the ground - to keep rates lower well past the time that the unemployment rate declines below 6.5 percent. The minutes will be scrutinised for clues as to how the Fed will move to draw down rates if they begin to rise too quickly for the US economic recovery.
USD/CAD down on session high
USD/CAD has climbed to CAD1.0807, up 0.39 percent on the day, falling slightly from a session high of CAD1.0831.