Canadian Dollar Mixed After BoC Surprise Rate Cut

Trading 27 mar 2020 Commentaire »

The Canadian dollar showed mixed trading against its major counterparts in the European session on Friday, after the Bank of Canada reduced its benchmark rate unexpectedly to cushion the economic shocks from the COVID-19 pandemic.

The BoC lowered its target for the overnight rate by 50 basis points to 0.25 percent, the bank said in a statement.

The Governing Council is willing to take further action as required to support the Canadian economy and financial system and to keep inflation on target, it added.

The central bank launched two new programs.

The Commercial Paper Purchase Program will help to alleviate strains in short-term funding markets and thereby preserve a key source of funding for businesses.

The Bank will begin acquiring Government of Canada securities worth minimum C$5 billion per week.

The loonie fell to 1.4154 against the greenback, from a 10-day high of 1.3989 set at 1:45 am ET. The next possible support for the loonie is seen around the 1.47 level.

The CAD/JPY pair hit a 2-day low of 76.81. At yesterday's close, the pair was valued at 78.14. The loonie is seen finding support around the 75.00 level.

Data from the Ministry of Communications and Internal Affairs showed that overall consumer prices in the Tokyo region of Japan were up 0.4 percent on year in March.

That exceeded expectations for an increase of 0.3 percent and was unchanged from the February reading.

The loonie rose to 1.5442 against the euro, reversing from a low of 1.5536 seen in the Asian session. Further rally may take the loonie to a resistance around the 1.50 area.

The loonie bounced off to 0.8504 against the aussie, from a 2-day low of 0.8581 logged in the previous session. The loonie is likely to find resistance around the 0.81 mark.


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U.S. Consumer Sentiment Drops Much More Than Initially Estimated In March

Trading 27 mar 2020 Commentaire »

Consumer sentiment in the U.S. deteriorated by much more than initially estimated in the month of March, according to revised data released by the University of Michigan on Friday.

The report said the consumer sentiment index for March was downwardly revised to 89.1 from the preliminary reading of 95.9.

The consumer sentiment index is now down sharply from the final February reading of 101.0, reflecting the fourth largest one-month decline in nearly a half-century.

Surveys of Consumers chief economist Richard Curtin noted the steepest monthly drop was the 12.7-point nosedive seen in response to the deepening recession in October 2008.

Curtin said there were also two 12.2-point slumps in response to the 1980 recession and Hurricane Katrina in September 2005.

"The 1980 and 2008 collapses in consumer confidence sparked long and deep recessions," Curtin said. "The Katrina decline was reversed within three months, and some observers compared that 'V' shaped economic episode to the expected impact of the coronavirus."

He added, "What didn't show a 'V' shape response was the recovery of New Orleans, a closer comparison to today's national economy."

The report said the current economic conditions index tumbled to 103.7 in March from 114.8 in February, while the index of consumer expectations plummeted to 79.7 from 92.1.

On the inflation front, one-year inflation expectations fell to 2.2 percent in March from 2.4 percent in February, while five-year inflation expectations were unchanged at 2.3 percent.


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U.S. Personal Income Climbs More Than Expected In February

Trading 27 mar 2020 Commentaire »

The Commerce Department released a report on Friday showing personal income in the U.S. increased more than expected in the month of February, while personal spending rose in line with economist estimates.

The report said personal income climbed by 0.6 percent in February, matching the increase seen in January. Economists had expected income to rise by 0.4 percent.

Disposable personal income, or personal income less personal current taxes, increased by 0.5 percent, while real disposable income, which is adjusted to remove price changes, rose by 0.4 percent.

Meanwhile, the Commerce Department said personal spending edged up by 0.2 percent for the second straight month, matching expectations.

Excluding price changes, personal spending inched up by just 0.1 percent for the third consecutive month.

"The rise in spending last month was arguably weaker than it looks given that it was largely driven by a weather-related jump in utilities spending, with underlying goods spending little changed," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

"Nevertheless, it suggests that real consumption was on course for growth of just over 1.5% annualized before the coronavirus struck," he added. "Clearly that's a different world now though."

With income once again rising by much more than spending, personal saving as a percentage of disposable personal income climbed to 8.2 percent in February from 7.9 percent in January.

Economists noted the continued increase in the savings rate came as consumers opted to save more amid emerging coronavirus concerns.

A reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth ticked up to 1.8 percent in February from an upwardly revised 1.7 percent in January.


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Dollar Slightly Down After U.S. Consumer Sentiment Index

Trading 27 mar 2020 Commentaire »

The Michigan University's Consumer Sentiment report for March has been published at 10.00 am ET Friday.

After the data, the greenback fell slightly against its major rivals.

The greenback was trading at 1.0980 against the euro, 1.2233 against the pound, 0.9626 against the franc and 108.50 against the yen around 10:05 am ET.


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*U.S. Consumer Sentiment Index Downwardly Revised To 89.1 In March

Trading 27 mar 2020 Commentaire »

U.S. Consumer Sentiment Index Downwardly Revised To 89.1 In March


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Dollar Mixed Ahead Of U.S. Consumer Sentiment Index

Trading 27 mar 2020 Commentaire »

The Michigan University's Consumer Sentiment report for March will be published at 10.00 am ET Friday. The consensus is for 92.00, slightly down from 95.9 in the prior month.

Ahead of the data, the greenback traded mixed against its major rivals. While the greenback held steady against the pound and the yen, it rose against the franc and the euro.

The greenback was worth 1.0969 against the euro, 1.2227 against the pound, 0.9643 against the franc and 108.71 against the yen at 9:55 am ET.


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*Canadian Dollar Declines To 2-day Low Of 76.81 Against Yen

Trading 27 mar 2020 Commentaire »

Canadian Dollar Declines To 2-day Low Of 76.81 Against Yen


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*Canadian Dollar Drops To 1.4146 Against U.S. Dollar After BoC Rate Cut

Trading 27 mar 2020 Commentaire »

Canadian Dollar Drops To 1.4146 Against U.S. Dollar After BoC Rate Cut


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U.S. Personal Income Climbs 0.6% In February

Trading 27 mar 2020 Commentaire »

The Commerce Department released a report on Friday showing personal income in the U.S. increased more than expected in the month of February, while personal spending rose in line with economist estimates.

The report said personal income climbed by 0.6 percent in February, matching the increase seen in January. Economists had expected income to rise by 0.4 percent.

Meanwhile, the Commerce Department said personal spending edged up by 0.2 percent for the second straight month, matching expectations.

A reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth ticked up to 1.8 percent in February from an upwardly revised 1.7 percent in January.


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Dollar Little Changed After U.S. Personal Income & Spending Data

Trading 27 mar 2020 Commentaire »

The U.S. personal income and spending data for February has been released at 8:30 am ET Friday. The greenback changed little against its major rivals after the data.

The greenback was trading at 1.1009 against the euro, 1.2264 against the pound, 0.9623 against the franc and 108.69 against the yen around 8:35 am ET.


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