Canadian rate hike
The Bank of Canada is set to raise interest rates tomorrow according to the majority of analysts. The Canadian dollar has already strengthened 4% against the greenback in the last 30 days and should shrug off the news of the US withdrawing from NAFTA to continue its great start to the year.
Brexit dominates the pound
UK inflation came out lower than the last few readings at 3% earlier today, causing the sterling to drop slightly against the dollar.
This is the first dip we have seen for several days after a strong start to the year for the pound. A lot of this has been down to positive talk coming from some EU members over favorable terms for Brexit. However, as we have seen in the past, this positivity can be reversed as quickly as it happens.
ECB meeting on the horizon
Tomorrow, all eyes will be on Eurozone inflation with the ECB meeting on Jan. 25. A strong reading will put more pressure on Mario Draghi to reduce stimulus further, but his reluctance to act is well-known and he is not one to be rushed into action.
First rate hike expected in March
The focus for the dollar will be split between industrial production from the US in the morning followed by several FED members speaking later on in the day. If the data beats expectations, there will be more talk of an interest rate rise with the Wall Street Journal’s survey of economists predicting hikes in March and June.
– Alex Fitzpatrick, The WorldFirst Team