CAD pares upbeat BoC gains, USD on fire -.....>

FOREX: CAD pares upbeat BoC gains, USD on fire

- CAD rallied on initial react to C$1.3065 after the expected 25bp hike to 1.5%.

Market talk had widely expected a dovish hike, but the BoC surprised

highlighting that higher interest rates will be warranted to keep inflation near

target. The bank did however remain cautious over trade. As CAD longs unwound

and the USD firmed across the board, USDCAD squeezed to C$1.3189.

- EURUSD spiked to highs of $1.1758 on react to an ECB source story that said

ECB Policymakers are said to be split on timing of the first hike. However, as

the stronger USD theme prevailed, the rate reversed to $1.1672. EURJPY held

above the 100-dma to print Y130.98.

- Trade headlines dominated USDJPY, the WSJ reported that China is considering

other ways to retaliate briefly taking the pair under Y111.00. But as UST yields

firmed, momentum-type accounts made a break of the key 111.45/50 area,

accelerating the move to 6-month highs of Y112.04.

- Commodity tied FX struggled with AUD & NZD registering losses of over 1%

against the USD. US CPI the main highlight tomorrow.