On Tuesday, the Euro held steady taking a breather after having rallied on the back of optimism about the Eurozone’s economic outlook and expectations for the European Central Bank (ECB) to wind down its massive monetary stimulus. Comments by the Estonian Central Bank Chief and ECB rate-setter Ardo Hansson reinforced those prospects. Hansson told a German newspaper that the ECB could end its 2.55 trillion Euro Bond-buying scheme in one step after September if the economy and inflation develop as now expected.
On Monday, the Canadian Dollar rose against the Dollar, as the greenback broadly fell and investors braced for a potential interest rate increase by the Bank of Canada this week and at least two more by the end of the year. According to Reuters’ poll, the Central Bank will kick off 2018 by raising interest rates, buoyed by robust job growth, even as uncertainty around the fate of the NAFTA.
Early on Tuesday as well, China’s Yuan advanced for the fourth day against the Dollar, supported by a strong official fixing. The People’s Bank of China (PBOC) set its official Yuan midpoint at the highest level in more than two years, at 6.4372 per Dollar. The PBOC recalibrated the template for daily Yuan fixings to nullify a discretionary counter-cyclical factor it introduced into the formula last year to contain the currency’s decline.
Meanwhile, Brent Crude prices consolidated recent gains at around $70 a barrel, a level not seen since 2014’s dramatic Oil market slump. Prices have been driven up by production curbs in OPEC nations and Russia, as well by strong demand due to healthy economic growth.