The EURUSD traded in a tight range overnight before breaking down to 1.5834 in this morning’s session. Investors are highly focused on thirty-nine S&P500 companies that release their reports today. With crude oil at $117/barrel and Gold spot at $916/oz, the greenback is struggling to gain support. Reports out from Japan indicate that investors continue selling the dollar and buying Japanese Yen. US Existing Home Sales and the House Price Index will be released today; the market hoping to see some stability in those numbers.
The Bank of England announced a robust mortgage rescue plan under which the central bank will swap commercial banks’ securities for UK treasury bills in the hopes of easing lending fears in the money market. Whether the plan deems to be a success remains to be seen. The GBPUSD continues its downtrend, trading down to 1.9745 in this morning’s session.
The Bank of Canada is widely expected to cut rates. The market is showing a high probability of a 50bp cut to 3.00%, however some analysts are forecasting a 25bp cut. Despite strong fundamental data out of Canada in the last six months, inflation has dropped to 1.4% in March from 2.5% in November.