NEWS / Foreign Exchange

Sterling moved higher on the back of these hawkish minutes

Overnight, the big news was out of the U.K., where the Bank of England's (BoE) minutes from the June meeting were released. The Monetary Policy Committee (MPC) voted 5-4 to keep rates on hold, with the minority favoring a rate hike, especially with increased CPI risks from energy prices. BoE Governor King voted for a rate hike and was in the minority since August 2005. Sterling moved higher on the back of these hawkish minutes.

The euro is virtually unchanged on the back of some mixed (and less significant) Euro-zone data. German producer prices were stronger in May than expected, while April industrial data was a mixed bag and Euro-zone construction output was down.

Today's U.S. economic data is extremely light. The most important data is the weekly U.S. oil inventory data released at 10:30. WTI crude has been flirting with the $70 level, which is an important psychological level. Price-bullish inventory data in coming weeks could cause a break-out of crude's recent range. Clearly, higher prices are likely to prove supportive of CAD and MXN.