Loonie remains steady during the banking holiday

Key Movers

The US Dollar Index (DXY) was up slightly so far today near the 100.53 level after falling to a 14-month low on Friday. The Chicago Purchasing Manager’s Index (PMI), which measures the economic health and business conditions of the Chicago area's manufacturing and non-manufacturing sectors, came in slightly higher than expected at 46.6 versus the anticipated 46.1. While there is not much new data today in the US, Federal Reserve Chair Jerome Powell is set to speak later today, and markets will be looking ahead to employment data later this week that could help dictate future rate decisions. The USD was up versus the EUR, but down versus GBP, AUD, and CAD slightly.

In Eurozone news, consumers lowered their inflation expectations to the lowest level in almost three years, indicating that the European Central Bank (ECB) could be nearing success in controlling prices. This data came to light via the Consumer Expectations Survey, which measures household confidence in the ECB’s ability to reduce inflation to its 2% target. Additionally, the German Preliminary Consumer Price Index (CPI) month-over-month came in lower than expected at 0% versus the expected 0.1%. CPI measures the average price change consumers pay for goods and services. So far today the EUR is down versus the USD, GBP, and CAD.

Last week and today, there was very little economic data from the UK, so monetary policy expectations drove the pound’s movement. Market participants anticipated the Bank of England (BoE) will lower rates by just 25 basis points (bps) in the two remaining council meetings this year. The bank began policy normalization by cutting rates by 0.25% in August, but left rates unchanged at its last meeting. GBP was up versus the USD and EUR, and slightly down versus the CAD this morning.