CPI TO DRIVE TAPERING DEBATE (FOR NOW)
• USD is mixed but generally weaker. Today’s CPI is the key for the tapering debate; Bullard continues to warn on threat of low inflation.
• CAD is slightly stronger as most driver turn temporarily in its favour.
• EUR is higher on limited news flow; reacting to a better growth outlook, positive developments for the UK and a weak USD.
• GBP is strong after strong retail sales increase skepticism over the BoE ability to keep rates on hold until H216. Technicals have turned bullish.
• JPY is flat, lacking direction – FinMin hints corp tax cut isn’t on agenda.
• AUD is strong; inflation expectations soften to 2.3%.
• NZD rallies on strong data; discussion over RBNZ gov power is focus.
Read the full report: FX Daily
Scotiabank