22 Jan 2015
US Session: BoC shocks market with surprise rate cut
FXStreet (Barcelona) - The market's clam was disrupted on Central Bank again, this time from leaks around the ECB's next move in QE and also the BoC's surprise rate cut.
The news wires reported that two officials of the Central European Bank said that the council have proposed monthly QE of EUR50b until the end of 2016 which had markets indecisive and the EUR volatile. Also, the BoC shocked the markets by making their first move in over four years by cutting rates down to 0.75% from %1, and this subsequently sent the CAD over 2.5% lower vs the greenback and 2.3% vs the Euro.
The EUR/USD has moved within a wide range with highs at 1.1679 and a low of 1.1547, rallying sharply only to meet strong supply, curbing the advances and putting the pair back towards the bottom of the range. From there, the euro drifted back onto the bid for the US sessions close and handover to Asia onto the 1.16 handle.
The Canadian dollar took off from 1.2064, making a high of 1.2391 before tapering back into the hands of the bears, but remaining firmly upon the 1.23 handle.
In the aftermath of the BoE's unanimous vote to remain on hold with current policy, Sterling had seen better days but for the most part the pair traded in a choppy and narrow range from below the 1.51 handle that the bears penetrated on a number of occasions while the bulls persisted with tests of the upside at 1.5140.
AUD/USD was damaged along the way also, with commodity currencies taking a hit under the wing of BoC's concerns and uncertainty around the global outlook. The price of gold fell from $1,304 to a low of $1,284 while the Aussie dropped form 0.8230 down to 0.8077 before moving into a sideways drift.
Key events:
BoC Interest Rate Decision 0.75% down from 1.00%
Housing Starts (MoM) (Dec) 1.089M vs 1.040M expected
Building Permits (MoM) (Dec) 1.032M vs 1.055M expected
The news wires reported that two officials of the Central European Bank said that the council have proposed monthly QE of EUR50b until the end of 2016 which had markets indecisive and the EUR volatile. Also, the BoC shocked the markets by making their first move in over four years by cutting rates down to 0.75% from %1, and this subsequently sent the CAD over 2.5% lower vs the greenback and 2.3% vs the Euro.
The EUR/USD has moved within a wide range with highs at 1.1679 and a low of 1.1547, rallying sharply only to meet strong supply, curbing the advances and putting the pair back towards the bottom of the range. From there, the euro drifted back onto the bid for the US sessions close and handover to Asia onto the 1.16 handle.
The Canadian dollar took off from 1.2064, making a high of 1.2391 before tapering back into the hands of the bears, but remaining firmly upon the 1.23 handle.
In the aftermath of the BoE's unanimous vote to remain on hold with current policy, Sterling had seen better days but for the most part the pair traded in a choppy and narrow range from below the 1.51 handle that the bears penetrated on a number of occasions while the bulls persisted with tests of the upside at 1.5140.
AUD/USD was damaged along the way also, with commodity currencies taking a hit under the wing of BoC's concerns and uncertainty around the global outlook. The price of gold fell from $1,304 to a low of $1,284 while the Aussie dropped form 0.8230 down to 0.8077 before moving into a sideways drift.
Key events:
BoC Interest Rate Decision 0.75% down from 1.00%
Housing Starts (MoM) (Dec) 1.089M vs 1.040M expected
Building Permits (MoM) (Dec) 1.032M vs 1.055M expected