The Bank of Canada held its monetary policy meeting on Wednesday. As widely forecast, the BoC left the key interest rate steady at 1.75%.
Ahead of the BoC meeting, Canada’s inflation data came out. Consumer prices were seen to be fairly stable for December. The BoC, in its statement, gave a cautious assessment of the economy as it stays alert to persisting slower growth and geopolitical risks.
US Existing Home Sales Rise More than Forecast
Existing home sales report for December beat expectations strongly. Data from the National Association of Realtors showed that existing home sales rose by 5.54 million in December, representing about a 3.6% increase on the month. This came after a drop of nearly 1.7% just the month before.
EURUSD Settles into a Range
The common currency is clearly seen moving into a sideways range between the 1.1100 and 1.1072 region. We expect this sideways movement to continue into today’s ECB meeting.
A breakout from either of these levels will potentially signal a near term momentum and direction. At the moment, the bias is mixed, but there is a possibility that the EURUSD could break to the downside.
UK Public Sector Borrowing Rises in 2019
The monthly report on the government public sector borrowing saw a modest decline in December. But compared over the year, borrowing was higher.
For December, the UK government borrowed about 0.2 billion GBP less compared to the same period in 2018. On a yearly basis, public sector borrowing was 4 billion GBP higher.
GBPUSD Breaks Past 1.3100 Resistance
The currency pair breached the resistance level of 1.3100 on Wednesday right after it broke the falling trend line. A brief retest saw price accelerating to the upside. If the pound sterling can stay above the 1.3100 level, we expect further gains. The next main target is at 1.32260.
Crude Oil Trades Weaker Despite Oil Shortage
Crude oil prices were down over 2% during the intraday on Wednesday. The declines came despite disruptions to oil supply lines in Libya. Earlier in the week, the EIA forecast that prices of Brent crude oil could be slightly lower by the middle of the year. Investors await today’s weekly inventory report.
WTI Crude Oil Could Slip to $56 a Barrel
The current declines in crude oil prices could push the price lower down to the $56.00 level. The bearish momentum could push oil prices lower over the near term. The Stochastics oscillator remains oversold, but the price action from the daily chart dictates that further downside is likely.