Bank of Canada Hikes Rate 25 Basis Points

The Canadian Dollar is holding steady and rangebound afterthe central bank hiked its benchmark interest rate 25 basis points as expectedbecause of an improving economy. Now that this news is history, the directionof the USD CAD will be triggered by whether traders want risk or will shy awayfrom risk.

The Canadian Dollar is holding steady and rangebound afterthe central bank hiked its benchmark interest rate 25 basis points as expectedbecause of an improving economy. Now that this news is history, the directionof the USD CAD will be triggered by whether traders want risk or will shy awayfrom risk.

The September Euro and September British Pound are tradinglower. The Euro pierced 1.30 overnight but for the second time in less than aweek, failed to attract fresh buying over this level. Traders are takingprofits ahead of the release later in the week of the European bank stress testresults. Nervousness over the release of the data is encouraging investors tobook profits after a strong rise. Traders are uncertain about what the stresstests will reveal. Some feel that the tests were not stringent enough. Othersfeel that it will reveal that several banks are undercapitalized. Rumorscirculated last week that as many as eleven banks may fail the test and needadditional capital.

The British Pound is under pressure because of awider-than-forecast June deficit. Pessimism is spreading in the U.K.as traders price in the strong possibility that the Bank of England will beforced to keep interest rates at historically low levels.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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