Week in Americas: Will Carney disappoint Loonie Bulls

This week the loonie has been one of the most actively traded currencies amongst the majors. It certainly makes a change from trading one of the most docile pairs of late.

USD/CAD has drifted higher, to the top end of the recent range, as the market begins to focus on next week’s Bank of Canada’s rate announcement. All week long curve traders have been pricing out the possibility of a rate hike into the middle of 2013. Investors are keen to see the Banks accompanying policy statement, looking for confirmation of the omission of previous wording that a tighter policy “may become appropriate.”

If it has indeed been dropped from the official statement, the market should see further pressure applied to the CAD as it may pertain to general market sentiment. Friday’s Canadian inflation figures (core +1.3% y/y) suggest that inflation is unlikely to be a major concern for the Bank of Canada over the coming quarters.

• Troika declares progress In Greece
• UK Sales Beat Market Expectations
• UK Unemployment Rate Falls to 7.9 Percent
• Olympics help UK Payrolls to Surge
• UK Austerity Might Have Had Adverse Effects
• Spain is offered a German Lifeline
• A look Inside the European Statistics Organization
• Bank of England Deputy Governor Fears the Worst is Still to Come
• Britain opposes ECB as head of Banking Union
• Europe Moves Towards a Single Banking Supervisor for the Euro Zone
• Merkel and France Clash on EU Budget Controls
• Spanish Banks Face More Losses
• Cyprus expects Bailout by Mid-November
• Royal Bank of Scotland Withdraws from Asset Protection Scheme
• Greece Close to Agreement as EU Summit Approaches
• IMF proposes a Spanish Italian Aid Request Package
• Germany Cuts Growth Forecast
• Spain Keeps its Investment Grade Credit Rating From Moody’s
• Euro Moves to Month-High above 1.31 on Spain Optimism Before Summit
• Greece Expects to Continue Receiving Bailout Funds
• Greece cuts unlikely to reach agreement before Mid-November
• IMF’s Lagarde: ESM and OMT need to be deployed

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