Although we had three central bank meetings in Europe today, the biggest move in the FX markets was triggered by a speech from the Bank of Canada’s Governor this afternoon which sent the Canadian dollar surging higher.
The British pound’s appreciation against the dollar was short lived during Tuesday’s trading session as investors evaluated the likely impact of UK inflation climbing to its highest level in almost six years.
The U.S. dollar appreciated during the week as the tax reform inched closer to reality. Fundamental data in the U.S. was positive for the currency but hourly wages again disappointed by coming below expectations. Given the importance of inflation indicators inside the Fed stagnant wages could make it hard on the U.S. central bank to keep raising rates in 2018.