Canadian Dollar is The Star !

The CAD has been the star so far this morning and overnight as well as comments from the BOC Governor Poloz set the market into a lot of confusion and the CAD prices began to run across all pairs like headless chicken. Poloz was due to speak in the early morning and during the speech he had said that there would be a period of 18 months when the BOC would watch what would happen before it decides on the policy. This was construed by the media as a statement that said that the rates would be on wait and watch mode for 18 months and this hit the USDCAD hard and it went down to 1.3280. But after sometime, Poloz clarified that his statement was directed towards watching the output gap and not with respect to the monetary policy as such, thus keeping the door open for rate cuts in the coming months and this encouraged the bulls and the USDCAD pair rushed back towards 1.3350 where it sits as of this writing.

In other moves, we saw some continue weakening in the yen and the USDJPY pair sits at the crucial range top close to 104.52 and it remains to be seen whether the range top will be broken today or whether the pair will choose to sit back inside its range.

In other news, the ANZ expects the RBNZ to cut rates in its meeting next month and this is in line with some other banks who also expect a rate cut in NZ during the next month.

Looking ahead for today, we have the German Ifo Business climate which will be released during the Euro session and we also have speeches from Carney and Draghi later on in the day during the US session. The German Business Climate is expected to come out strong, in line with improving data from the European region which has been the trend over the last couple of months and this is likely to keep the euro supported.
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