ECB able and willing to act if needed

On Wednesday, the Canadian dollar spiraled downwards against the American dollar in the post-BoC (Bank of Canada) press release, sending the USD/CAD pair almost over the 1.3080 threshold. BoC’s press release was regarding the monetary policy, stating the fact that the bank will adhere to it going forward and no changes will be made to the 0.5% benchmark rate. This decision doesn’t come as a surprise, as it was widely expected. Overall, the release itself had a dovish tone with the growth forecast for 2016 and 2017 being revised lower and expectations of full economic capacity pushed forward in the second half of 2017. About inflation, BoC’s analyses forecast a domestic consumer price under the 2% threshold until early 2017.

Thursday was released the household spending (represented by retail sales) figures by the UK’s ONS (Office for National Statistics). The latest data pointed a sharp rise for September. The headline figure came out 6.5% yoy (year on year), with an expected value of 4.7% and a previous hike in August of 3.5%. Mom (month-on-month) retail sales went up 1.9%, over the estimated 0.3% from previous 0.2%. The growth was the biggest since December, 2013. According to the analyses, the biggest impact came from the beer and food sales around the Rugby World Cup, held in Britain this year.

EBC (European Central Bank) also released on Thursday information according to which the main monetary policy rate for refinancing operation, the interest rate for marginal lending and the deposit facility rate unchanged at 0.05%, 0.30%, respectively -0.20%. ECB’s President Draghi stated that the bank is ready to act to maintain the rates at par, but the measures need to be reassessed no later than the December meeting. He also reinforced the flexibility of the QE program and highlighted the decreasing risks of its outlook, mostly due to the slowdown in EMs.

Regarding crude oil, we can see that prices have recovered yesterday with a graph line in the shape of a smile (hopefully for the best), registering small gains around the $46.00 per barrel threshold. The WTI (West Texas Intermediate) barrel started the session on the positive side, although the early momentum started to lose power around in the above-mentioned area. Overall, prices for the black gold are recuperating slowly from three consecutive session closed with loss, despite the firmer tone of the greenback in the light of the new dovish position taken by the ECB.