The US dollar tumbled yesterday following reports that China is thinking of slowing or halting its US Treasury purchases, while its Canadian counterpart fell the heat of NAFTA concerns. Today, the main event is likely to be the minutes of the latest ECB policy gathering.
The dollar traded lower against all but two of its G10 counterparts on Wednesday. It gained only against CAD and GBP, while it lost the most ground against AUD. The Aussie rallied overnight after data showed that Australia’s retail sales accelerated to +1.2% mom in November from +0.5% in October, confounding expectations of a modest slowdown to +0.4%.
The Canadian dollar was the main loser yesterday as it collapsed on reports that Canada is increasingly convinced US President Trump will soon announce the withdrawal of the US from NAFTA. This poured some cold water on expectations for a BoC rate hike next week, but in our opinion, there is still a decent chance for the Bank to proceed and push the hike button. Economic data, if seen in isolation, have been flashing the green light for such an action.
Read the full financial markets daily report on JFD Research.