FXStreet (Delhi) – Derek Halpenny, European Head of GMR at MUFG, notes that the ahead of the all-important FOMC decision next week, we have the Bank of Canada decision this afternoon and the RBNZ decision tonight. While the consensus is very much for the BOC to remain on hold, the consensus for the RBNZ tonight is for a cut.
Key Quotes
“There is certainly a risk that additional monetary easing is going to be required by the Bank of Canada when you consider the risks in the crude oil market. The Bank of Canada also does have history this year in surprising the financial markets with easing and hence Governor Poloz is not afraid to surprise the markets.”
“However, given the reasonable financial market conditions going into this meeting and given the data flow from Canada has been on the stronger than expected side, an unchanged decision appears more likely.”
“We’d still expect a pretty dovish statement that highlights the potential for additional action if global financial market conditions warrant and that should ensure the USD/CAD remains well supported in the aftermath of the decision.”
“While the consensus is very much for the BOC to remain on hold, the consensus for the RBNZ tonight is for a cut. The RBNZ’s estimate for real GDP and inflation are perhaps too high and lower forecasts are likely.”
“NZD/USD is about 3.5% lower since the start of August so an expectation of easing in response to the upturn in financial market turmoil is probably in the price and a strong signal to ease again would be required to push the NZD/USD much lower still.”
For more information, read our latest forex news.
No comments:
Post a Comment