Brexit: 4th round
In the UK, the hunt for the next Bank of England governor has formally began today. Current governor, Mark Carney, is scheduled to leave at the end of January 2020 but the chancellor of the exchequer, Philip Hammond, is already looking for the perfect replacement. He will be testifying to the Treasury committee this morning on last month’s spring statement and might drop some hints about potential candidates. Meanwhile, Prime Minister Theresa May is considering putting her Brexit deal through another vote in the House of Commons: since talks with the opposition Labour party are failing to progress, PM May is planning on calling a new vote, potentially as early as next week. The aim is to pass the bill before May 22nd so the UK doesn’t have to take part in the European Parliament elections.
In the Euro zone, the outlook remains negative as the Bundesbank, the central bank of the Federal Republic of Germany, thinks growth could be weaker than forecast. As a result, the EUR/USD pair dropped to its lowest level in 3 weeks, trading this morning below 1.12. Yesterday, an unexpected increase in new home sales helped to support the USD, which rallied against all of the major currencies except for the Japanese Yen.
The focus today is the Bank of Canada interest rate decision: investors expect the central bank to maintain its overnight target rate at 1.75 per cent but remain unsure of the BoC’s reaction, especially considering the recent signs of weakness in the economy.
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