![]() ![]() “The concern at the Fed will be that high inflation today can fuel expectations of higher inflation tomorrow and the day after that and so on. “We note that Canadian short-term yields have edged lower in the past couple of sessions, compressing spreads somewhat and weighing on the CAD, as markets await details of the Bank’s new mandate-although we doubt the new framework will materially alter near-term rate prospects.” All indications are that the Bank’s 2% inflation target will be retained but the mandate will contain language which allows for policymakers to allow for changes in the labour market when setting policy,” noted Shaun Osborne, Chief FX Strategist at Scotiabank in its Dec 13 note. “The CAD is finding it hard to resist the broader push higher in the USD this morning even with the risk backdrop of stocks and commodities not especially negative. counterpart on Wednesday as investors remain cautious ahead of the Federal Reserve’s policy announcement on Wednesday, where it is widely expected to signal an earlier end to its asset purchases weak crude oil prices also weighed on the commodity currency. The Canadian dollar weakened against its U.S.
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