Canadian Dollar jumps sharply overnight as boosted by comments from a top BoC official that raises prospect of a rate hike. Senior Deputy Governor Carolyn Wilkins said in a speech that adjustment to lower oil prices was "largely behind us" with help of the rate cuts in 2015. And, there are "encouraging signs" of broadening growth across regions and sectors. Meanwhile, there is "significant monetary policy stimulus in the system". And, she noted that "as growth continues and, ideally, broadens further, Governing Council will be assessing whether all of the considerable monetary policy stimulus presently in place is still required." This is seen by the markets as an indication that the door for further rate cut from the current 0.50% is closed. And the next move would be a hike.
USD/CAD finally resumed recent fall from 1.3793 by breaking 1.3273 so far. The pair should test 1.3222 support in near term. We're favoring the case of medium term reversal in USD/CAD and break of 1.3222 will affirm our view and target 1.2968 support next. EUR/CAD also drops sharply to as low as 1.4856, comparing to this month's high at 1.5257. But EUR/CAD has been rather resilience due to strength in Euro. And outlook in EUR/CAD will stay mildly bullish as long as 1.4823 support holds. CAD/JPY also rebounds strongly but it's held in range above 80.55 short term bottom. Outlook is a bit mixed and we'll stay neutral on the cross first. Break of 81.49 will indicate near term reversal for 88.90. Meanwhile, break of 80.55 will pave the way to test 74.80 low.
US Treasury recommends over 100 changes to financial regulation
In US, the stock markets some what stabilized. NASDAQ dipped initially to as low as 6110.66 but pared back much losses to close at 6175.46, just down -0.52%. DOW closed down -0.17% at 21235.67 while S&P 500 closed down -0.1% at 2429.39. 10 year yield rose slightly by 0.014 to 2.213 but is kept well below near term resistance at 2.297. It is reported that US President Donald Trump's Treasury is calling for scaling back some of the post 2008 financial crisis regulations. A near 150-page report was produced and there were recommendations of over 100 changes to financial rules. But the report stopped short of calling for the repeal of the so called Dodd-Franck financial regulation law, which Trump called a "disaster". Treasury Secretary Steven Mnuchin said that the focus of the report was "what are the things that we can do to unlock burdensome regulations and overlapping regulations and work with the regulators?"