The Greenback Demand Has Weakened Significantly. We Expect the Bank of Canada Meeting

The US dollar is declining against a basket of currency majors. The US dollar index (#DX) closed the trading session in the negative zone (-0.21%) again. Fed Governor Lael Brainard hinted that an even stronger easing of US monetary policy might be required. Also, the US currency is under pressure since US President Donald Trump is not planning new negotiations on the second phase of trade deal with China. Trump explained this as follows: "We made a great trade deal. But, as soon as the deal was done, the ink wasn't even dry and they hit us with the plague." The plague is meant to be coronavirus, which first appeared in the Chinese city of Wuhan.

Also yesterday, Donald Trump announced the signing of a law that provides for sanctions against Chinese officials who have restricted Hong Kong’s freedoms. Along with the law, Trump prepared a decree that would abolish Washington's privileged attitude toward Hong Kong. This will lead to the termination of trade cooperation and the cessation of the transfer of American technology to Hong Kong. Today, the Bank of Canada meeting will be a key event. It is expected that the regulator will keep the key marks of monetary policy at the same level. We recommend paying attention to the comments by Central Bank representatives.

The "black gold" prices continue to rise. Currently, futures for the WTI crude oil are testing the $40.65 mark per barrel. At 17:30 (GMT+3:00), crude oil inventories will be published.

Market indicators

Yesterday, there was the bullish sentiment in the US stock market: #SPY (+1.30%), #DIA (+2.31%), #QQQ (+0.71%).

The 10-year US government bonds yield is consolidating. At the moment, the indicator is at the level of 0.62-0.63%.

• - UK consumer price index at 09:00 (GMT+3:00);
• - Canada's inflation report at 15:30 (GMT+3:00);
• - Bank of Canada interest rate decision at 17:00 (GMT+3:00);
• - Fed's "Beige Book" at 21:00 (GMT+3:00).

by JustMarkets, 2020.07.15

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.