Rand weaker as market awaits Mario Draghi press conference
- Author: Anthony Vega Jan 28, 2018,
Jan 28, 2018, 0:15
The euro has roared to a more than three-year high against the dollar to reach $1.24 on the back of a stronger eurozone economy, and after US Treasury Secretary Steven Mnuchin talked down the greenback on Wednesday.
He accused the USA of "targeting" exchange rates to boost its economic interests, thus violating an agreement that "has been in place for decades".
NAB Research discusses EUR/USD outlook ahead of tomorrow's European Central Bank meeting and notes that while the pair is is over 3.5% higher from since the last European Central Bank meeting Minutes were released, its recent rally reflects the broadly weakening USD.
North of the border, the Bank of Canada kicked off 2018 by hiking interest rates, buoyed by robust job growth and having raised rates twice back-to-back past year, even as uncertainty around the fate of the North American Free Trade Agreement lingers.
Speaking in Davos, where he is attending the World Economic Forum, Mr Trump said "frankly nobody should be talking about the dollar's value" before adding he supported a strong USA currency. The bank said it would leave interest rates at current levels "well past" the end of its asset-purchase program, set to finish in September.
Draghi said Thursday that "an ample degree" of stimulus support is still needed despite an increasingly robust economic recovery.
The pound rose as high as $1.4326 in morning trading, while the euro breezed to $1.2458, having risen to its highest since the end of 2014 yesterday.
"The strong cyclical momentum, the ongoing reduction of economic slack, and increasing capacity to utilization strengthened further our confidence that inflation will converge towards our inflation aim of below but close to 2 percent". "It's not that we were arguing but we were debating the pros and cons. the big cloud over the forecast, as well as our discussion, is NAFTA", Poloz told a news conference.
While this positive showing is not enough on its own to reverse the long-running wage squeeze this still boosted the odds of the Bank of England (BoE) raising interest rates again in the near term.
The interest rate announcement from the European Central Bank is due on Thursday, headlining a busy day for the European economic news.
He was speaking after the ECB's 25-member governing council left its benchmark refinancing rate at an historic low of 0%.
European Central Bank president Mario Draghi in Frankfurt on Thursday.
"Several (ECB Governing Council) members expressed concern, and this concern was in a sense broader than simply the exchange rate, it was about the overall status of global relations right now..." The step pumps newly printed money into the economy to raise still-weak inflation. The corresponding index is seen at 112.3 in January versus 112.5 in December. The reading follows business activity surveys that also show a strong upswing in the 19-country eurozone.