financialmirror.com

ECB and SNB rate decisions, US data to keep action going

The European Central Bank (ECB) and the Swiss National Bank (SNB) will announce monetary policy decisions following the last policy meeting of the year on Thursday. Later in the day, weekly Initial Jobless Claims and November Producer Price Index (PPI) data from the US will be watched closely by market participants.

The US Bureau of Labor Statistics (BLS) reported on Wednesday that annual inflation, as measured by the change in the Consumer Price Index, edged higher to 2.7% in November from 2.6% in October, as anticipated. On a monthly basis, the CPI and the core CPI both rose 0.3% to match analysts’ estimates.

The DXY Dollar Index continued to edge higher after November inflation report and closed the fourth consecutive day in positive territory. Early Thursday, the USD Index holds steady at around 106.50.

During Asian trading, data from Australia showed the Unemployment Rate declined to 3.9% in November from 4.1%. This came in better than market expectations of 4.2%. In this period, Employment Change was up 35,600, compared to the market forecast of 25K. AUD/USD gathered bullish momentum on upbeat labour market data and was last seen gaining 0.8% on the day above 0.6400.

The Bank of Canada announced on Wednesday that it lowered the policy rate by 50 basis points to 3.25%, as expected. In its policy statement, however, the BoC adopted a cautious tone regarding further policy easing.

The BoC dropped the language about it being reasonable to expect further rate cuts if the economy were to evolve in line with the forecasts. Instead, it said that it will evaluate the need for further rate cuts one decision at a time. USDCAD edged lower following the BoC decision and registered small daily losses on Wednesday. Early Thursday, the pair is on the back foot and trades below 1.4150.

USDCHF closed marginally higher on Wednesday, but lost traction in the European morning on Thursday. The pair was down 0.2% on the day at 0.8825. The SNB is expected to cut the policy rate by 25 bps to 0.75%.

EURUSD continued to push lower and posted losses for the fourth consecutive trading day on Wednesday. The pair staged a rebound early Thursday and trades comfortably above 1.0500.

The ECB is forecast to lower key rates by 25 bps. Following the decision, ECB President Christine Lagarde will deliver the policy statement and respond to questions at a press conference.

GBPUSD posted small losses on Wednesday, but managed to find a foothold early Thursday. The pair was last seen edging higher toward 1.2800.

USDJPY fluctuates in a tight range above 152.00 after closing in positive territory on Wednesday.

Gold extended its weekly rally and gained about 1% on Wednesday. XAUUSD is in a consolidation phase near $2,720 in European trading on Thursday.

(Source: OANDA)

Read full news in source page