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Key S/T Resistance Exposed


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FOREX: The USD led the way on Wednesday. CAD rallied on the initial reaction to
the BOC's exp. 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 re: trade.
As CAD longs unwound & the USD firmed across the board, USD/CAD squeezed to
- EUR/USD spiked to highs of $1.1758 on reaction to an ECB source story that
said ECB policymakers are split on the meaning of `through summer' & on the
timing of the first rate hike. However, as the stronger USD theme prevailed, the
rate reversed to lows of $1.1666. EUR/JPY held above the 100-DMA.
- Trade headlines dominated USD/JPY, the WSJ reported that China is considering
other ways to retaliate to U.S. tariffs which briefly took the pair under
Y111.00. But as Tsy yields firmed the pair broke the key Y111.45/50 area,
accelerating to 6-month highs of Y112.17. Commodity tied FX struggled with AUD &
NZD registering losses of over 1% vs. USD.
- U.S. CPI, Fed's Harker & Kashkari dominate on Thursday.
MNI London Bureau | +44 0203-865-3809 |