Dollar remains mixed in quiet trading today. With wholesale inventories as the only economic data scheduled to release from US today, market's focus will likely be on Bernanke's speech on inflation. However, Bernanke is indeed not expected to deliver any surprise today. In particular, with oil prices staying above $70 a barrel, Fed would likely remain highly alerted about inflation risk. Recent growth data support moderate expansion in the economy in the second half of the year. Meanwhile, Bernanke has warned the risk of spillover of the housing market slowdown recently already. More consolidation will likely be seen until Trade Balance and Retail Sales later this week. Though, May trade balance in UK could trigger some volatility in the Sterling.
The biggest mover today could be the Canadian dollar which recovers mildly from a fresh multi-decade high against dollar at 1.0442 made yesterday. BoC is widely expected to raise rates by 25bps to 4.50% today, after being on hold 8 times after last hike in May 06. The CAD has been supported firmly since BoC's warning of another rate hike in the 'near term' and recent strong readings in core CPI that stayed above 2%. Recent growth data were strong too with Q1 GDP growth reaching 3.7% yoy rate and Jun's job growth beating expectation by a double. Further strength in the CAD will likely be seen if BoC indicates the possibility that the expected rate hike today is not enough to bring inflation down yet.
