arrow
logo

Alvexo - Giving Back To The Community

Learn More

Canadian Dollar Gets a Lift

Daily Analysis - 13/06/2017

Prospect of a Rate Hike Lures in Loonie Buyers

canadian-dollar


The Canadian dollar is gaining in Tuesday morning trade after the country’s Central Bank hinted interest rates could rise sooner than what is currently expected by market participants. The reaction in CAD was a rally to a two month high against the US dollar after climbing over 1.00% on Monday.

Bank of Canada Paints Brighter Economic Outlook


The loonie spiked following comments from Bank of Canada Senior Deputy Governor Carolyn Wilkins, who said the impressive first quarter growth could push the Central Bank to consider whether highly accommodative interest rates are still required. The Central Bank cut rates twice in 2015 in the wake of the global oil rout, with the key rate remaining unchanged at 0.50%.

Canada’s gross domestic product expanded at an annualised pace of 3.70% during the first three months of 2017, with rising crude oil production and stronger consumer spending driving a broad-based recovery.  After not raising the benchmark rate in seven years, the Bank of Canada is scheduled to make its next interest rate decision on July 12th amid the growing prospect of a gradual shift away from loose monetary policy. EURCAD was last seen around the 1.4865-mark, with immediate support sitting at 1.4840.

popup_close
eurcaddaily06132017

US Budget Deficit Climbs


Highlighting the challenges facing President Donald Trump as he looks to rebalance spending priorities and cut taxes, the US budget deficit widened further in May. The budget gap soared to $88.4 billion last month from $52.5 billion a year earlier amid increased government spending in areas such as Medicaid and defence. Receipts from individual and corporate taxes rose 7.00% to about $240.0 billion, while spending jumped 19.00% to approximately $329.0 billion according to figures announced by the Treasury Department late on Monday.

The rise in deficit coincides with the Trump administration’s proposal to implement steep tax cuts alongside the push for sharper reductions in spending. However, Trump's proposed budgetary changes depend on GDP growing at an annual rate of 3.00% after not managing to grow at that pace since 2005. After extending Friday’s losses on Monday, S&P 500 futures are rebounding from the lows of last session to trade around 2430.

popup_close
sp-jun17daily06132017

Australian Business Conditions Ease


A survey regularly conducted by the National Australia Bank underlined business conditions deteriorating moderately during the month of May, reversing from a multi-year high alongside a slump in business confidence. The NAB’s Index of Business Conditions fell 1 point from April to 12. However, business confidence fell sharply, slipping 6 points to 7 in May.

The moderation in business conditions last month was largely driven by weakness in the construction and property sectors. The latest figures follow official data from last week that showed Australian economic activity decelerating during the first quarter to its slowest year-over-year pace of growth since 2009. That prompted some economists to warn that the Reserve Bank of Australia might soon need to slash interest rates again. In the meantime, AUDUSD is currently perched just below the strong resistance at 0.7565.

popup_close
audusddaily06132017-2

Turkish GDP Growth Accelerates


The Turkish economy grew faster than expected during the first quarter after the Federal Government boosted expenditures and household spending remained strong. Gross domestic product increased 5.00% in the three months through the end of March from a year earlier, topping all estimates compiled by the Bloomberg survey of economists. When adjusted for seasonal fluctuations, output rose 1.40% compared to the final three months of 2016 according to Turkey’s state statistics institute.

The government augmented spending, most notably on wages and infrastructure, to spur the economy following a failed military coup that dented growth last year. The expansive fiscal policies also lifted consumer consumption, which accounts for almost two-thirds of the Turkish economy and has traditionally been the key growth driver. USDTRY is falling Tuesday, with the pair currently trending near 3.5200.

popup_close
usdtrydaily06132017

Upcoming Events

  • Time
  • Currency
  • Event
  • Forecast
  • Previous
  • 8:30 GMT
  • GBP
  • CPI YoY (May)
  • 2.70%
  • 2.70%
  • 8:30 GMT
  • GBP
  • Core CPI YoY (May)
  • 2.40%
  • 2.40%
  • 9:00 GMT
  • EUR
  • German ZEW Economic Sentiment (June)
  • 21.5
  • 20.6
  • Tentative
  • USD
  • OPEC Monthly Report
  • 12:30 GMT
  • USD
  • PPI MoM (May)
  • 0.10%
  • 0.50%
  • 12:30 GMT
  • USD
  • PPI MoM (May)
  • 2.40%
  • 2.50%

Please note that CFDs are a leveraged product and may result in the loss of your entire capital. Please ensure that you fully understand the risks involved.