CAD holds ahead of Bank of Canada interest rate announcement.      

Key Movers

The USD Index is holding near lows seen last June, as markets wrestle with expectations of what the global economy will look like in 2023. As traders revamp global demand forecasts, oil has declined from recent highs of $82+ to around $80. Equities markets this morning are pointing towards a lower open in North America after tougher sessions were experienced in European trading. The only data in the US today is the weekly release of oil inventories from Cushing OK. Focus will begin to turn to Friday’s PCE inflation numbers, as the Fed’s preferred measure of inflation this could be instructive ahead of next week’s FOMC rate announcement.

In APAC trading overnight, inflation prints in Australia came in higher than expected. Year over Year prices went up 7.9% in Q4, compared with the consensus of 7.5%. This shifts attention to the Royal Bank of Australia and what further rate action it might take to get prices under control.

The Euro continues to hold ground against other major currencies as business sentiment in Europe’s biggest economy took a positive turn in the last month. The IFO Business climate survey increased from 88.6 in December to 90.2 in January, indicating a more optimistic environment.