Trading Mid-Day Update (05/07)
During today’s Currency Call, Gim Hong highlighted that the Bank of England (BoE) held interest rate unchanged at 0.10% while quantitative easing remains at £895 billion. The central bank will be slowing down the pace of asset purchase from £4.4 billion per week to £3.4 billion per week as a result of the recent strong growth in the UK economy. However, BoE Governor Andrew Bailey said that the slowdown in the pace of asset purchase does not imply a change in monetary policy stance. Furthermore, the central bank has not concluded on reducing quantitative easing. This led to the weakening of GBP across the board.
Scott highlighted that the U.S. dollar index failed to break above the 91.30 level after several attempts and fell back down to the 90.90 level. With the U.S. nonfarm payroll data due for release at 2030 (SGT), if the dollar index moved lower through 90.80 and find support at the 90.50 level, look for buying opportunities.
Jin highlighted that the forecasted result for the U.S. nonfarm payroll data is likely to have been priced-in, thus we may not see a big movement in the USD.
The Canadian employment data will also be released later at 2030 (SGT).
During the day, USD/CAD strengthened slightly.
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