The Loonie trades slightly higher following bets that the Fed might cut rates at least once this year.

Key Movers

In the U.K., there was a mixed bag of data keeping the chances of a Bank of England rate cut this year intact. GDP and manufacturing numbers were released; the positive surprise was the GDP numbers (YoY) which came in at 1.1 percent when the forecast was 0.8 percent. However, industrial production (YoY) came in at -1.8 percent versus a survey of only -0.8 percent, and manufacturing production came in at -2.5 percent versus the -1 percent expected. The trade balance came in positive, probably because of a weak pound over the last few months, at +7,715 million Pounds versus the -350 million pounds expected. As a consequence, the Pound rallies 0.17 percent versus the U.S. dollar, trading at 1.2936. The doubts surrounding the chances of the U.K. reaching a trade deal with the European Union before its transition is keeping the direction of the Pound blurry for the next few days. The Aussie dollar rallies strongly versus the U.S dollar this morning due to a positive mood in the capital markets and the S&P 500 touching new highs in overnight trading. The AUD/USD pair trades at 0.6772 at the time of this writing. The Euro held close to a four-month low against the U.S. dollar, trading at 1.0889, an intraday low, as market participants assess the impact of the death toll from the coronavirus, and while uncertainty has emerged in Europe over who will succeed German Chancellor Angela Merkel. The ECB’s policy meeting in January revealed that a rate hike isn’t on the horizon. It also implied its long-awaited strategic review wouldn’t deliver anything meaningful in the next few weeks. This uncertainty is likely another reason for the Euro’s weakness.