Members of the ECB’s governing council attend the central banker’s symposium in Wyoming and reveal that they remain divided on whether the bank should lower the benchmark interest rate given recent signs of economic improvement.
ECB Split On Opinion
Policy makers from the European Central Bank who attended the yearly gathering at Jackson Hole, Wyoming indicated that they remain divided on implementing any further rate cuts, as the regional economy has rebounded. Many of the members, including the governor of the central bank of Cyprus, indicated that they were in favor of lowering the cost of borrowing money. Foreign currency investors will keep a close watch on any clues the officials may offer as the ECB is preparing to issue its economic forecast shortly. Speculators believe the forecast will show that confidence has risen the most since 2012; a factor that they say may push the Euro rate even higher.
New Zealand Posts A Deficit
In the South Pacific, the New Zealand Dollar advanced versus the greenback despite negative news which revealed that the country posted a trade deficit. The Kiwi’s gains were mostly due to uncertainty currently reigning in the market on the Federal Reserve’s next moves within the coming month. In New Zealand, official figures confirmed that the trade balance reached a deficit of NZD 774 million in July, after having sustained a surplus of NZD 374 million the prior month. The Kiwi also managed to climb against the Euro as the data showed that imports surpassed exports. Prime Minister John Key stated that the Reserve Bank may decide to increase the key interest rate, though not as much as expected, due to new lending restrictions now in place for home buyers. The Australian Dollar traded higher against its U.S. peer, as demand for the latter remained low due to concerns over whether the Federal Reserve will actually begin reducing stimulus.
Canadian Dollar Edges Lower
The Canadian Dollar fell against its U.S. counterpart and versus the majority of its Forex exchange peers as investors continued to wonder whether the Federal Reserve may consider reducing bond purchases. The Loonie pared a decline against the U.S. Dollar subsequent to news which showed that durable goods orders dropped more than estimated. The Canadian Dollar had already begun its move to the downside after domestic releases revealed that retail and wholesale sales plungedwhile consumer prices remained beneath the Bank of Canada’s inflation goal.