Canadian Dollar Heads For Monthly High Against USD Ahead of BOC Rate Hike

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1. Canadian Dollar Heads For Monthly High Against USD Ahead of BOC Rate Hike
A policy meeting by the Bank of Canada is set to be the most exciting item on next week’s calendar as a 0.5% rate increase is expected. The Bank of Canada will hike interest rates on July 11 as strong job growth and rising inflation pressures override concerns about a deepening trade rift with the United States. This has kept the CAD supported this week and pushed the loonie (USDCAD) lower.*

2. EUR/USD: Draghi’s Speech Eyed
EURUSD has noted a morning rally on Monday as market participants look to the ECB President Mario Draghi’s testimony before the Committee on Economic and Monetary Affairs of the European Parliament. Investors will be scrutinizing any comments on the central bank’s monetary policy outlook which are expected to drive sentiment surrounding the shared currency and infuse a fresh bout of volatility. Draghi will speak at 13:00 GMT today.**

3. Dollar Sags On Weak U.S. Wages Data, Brexit Woes Weigh on Pound
The dollar struggled near 3-1/2-week lows against its peers on Monday after U.S. jobs data showed slower-than-expected wage growth. The market will be incredibly focused on Fed chatter this week as downside risks from tariffs will continue to be discussed by Fed officials. It is important to note that should the U.S. Administration follow through with the threat of a $200 billion + duties on Chinese goods, this will inevitably lead to some negative implications for both the US and global growth prospects.

Elsewhere, the sterling also noted a dip as a key member of Britain’s cabinet, Brexit Secretary David Davis, resigned over Prime Minister Theresa May’s Brexit plan. The GBP managed to recover to trade flat against the EUR as of 7:15 GMT. It is important to note, that the United Kingdom will see a batch of important releases on Tuesday, which, after this week’s series of better-than-expected PMIs for June, could further boost the odds of a rate hike by the Bank of England as early as August.***

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*Source: Investing Jul 09, 2018 12:09 AM ET

**Source: FXStreet 9.7.2018 05:17 GMT

***Source: Reuters 9.7.2018 07:25 GMT

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