The US Dollar regained some composure yesterday, strengthening after a rise in bond yields and comments from a Federal Reserve voice that a June interest rate hike is a real possibility. The Euro-US Dollar rate slipped back into the $1.11 area after higher levels earlier in the day on Tuesday.
There is no meaningful UK data today, so Sterling is likely to meander in narrow ranges but it did recover a little yesterday on some profit taking. Sterling is up by a cent against the Euro but is still shy of $1.30 against the USD.
The only interesting scheduled news today are the speeches by European Central Bank (ECB) President Mario Draghi and one from their Chief economist, Peter Praet. As is generally the case, the subject of their speeches will be ignored as traders seek to tease any hints of interest rate or Quantitative Easing (QE) changes from their subtexts. We had improved German Business Climate sentiment announced earlier today but that hasn’t strengthened the Euro up until now.
The Bank of Canada (BOC) makes an interest rate announcement this afternoon. No change is forecast but these are volatile times for the Canadian Dollar and its US counterpart. Changes are happening in the US economy and, potentially with America’s relationship with Canada, so there is always scope for the BOC to talk of further interest rate easing.
Other than this, the markets are quiet. Have a good Wednesday.
A guy applies for a job as a lumberjack. He is pallid, no more than five feet tall and weighs less than 7 stone. "Sorry,” says the lumberjack boss, eyeing the man up and down, "You're just too small."
"Give me a chance to show you what I can do," the guy pleads. "You won't regret it."
"Okay," says the boss. "See that Scott’s Pine over there? Let's see if you can chop it down."
The tree has a trunk that measures 30 feet around and it stands a full 80 feet tall. Nevertheless, half an hour later, the mighty tree is felled. It falls neatly into a gap and doesn’t touch another tree on the way down. The lumberjack boss is astonished.
"Where did you learn to cut trees like that?" he asks.
"The Sahara Forest."
"Don’t you mean the Sahara Desert?" says the boss.
"Well that's what they call it NOW."