All signs would indicate that Jerome Powell attempted to temper his comments from Tuesday when he made his second appearance to testify before the U.S. Senate yesterday. In order to trim some credibility from the scenario of four key rate increases in 2018, Powell first confirmed that the U.S. economy is showing no signs of overheating. What’s more, according to certain indicators, there could be surplus production capacity in the job sector. These facts notwithstanding, the greenback showed little reaction, possibly due to the lack of conviction from the newly installed central banker.
Elsewhere, U.S. President Donald Trump is continuing his “trade war,” announcing his intention to slap a 25-percent import tariff on steel and a 10-percent tariff on aluminum, potentially next week. Our Foreign Affairs Minister Chrystia Freeland wasted no time in confirming that she will take the necessary measures to safeguard our interests in this sector. Let’s just say that this does nothing to help NAFTA talks.
Canadian GDP data for December are due out. For the loonie’s sake, let’s hope the reading is a positive one.
Stéphane Goulet
Range of the day: 1.2790 – 1.2910