ECB & BOE ON HOLD; DRAGHI TO RETAIN DOVISH TONE
• USD is strong after the FOMC made only minor changes, China’s PMI is strong at 50.3; BoE & ECB makes no change; Draghi & nonfarm loom.
• USD—after this week’s risk events we expect previous med‐term strong USD theme to remain in place. Nonfarm is the key to tapering.
• CAD is weak but trading within yesterday’s range.
• EUR is weak after the ECB left rates on hold at 0.5% & PMI rises to 50.3. Draghi likely to retain dovish tone as data is offset by strong EUR.
• SEK & NOK are weak as both country’s PMI disappoint.
• GBP rallies; BoE makes no change to rates (0.5%) or QE; PMI is strong.
• JPY is weak; Nikkei rallies 2.5% and relative policy supports USD.
• AUD, after reaching a multi-year low, stabilized after China’s PMI.
Read the full report: FX Daily
Scotiabank