USD/JPY recorded small gains in the Asian session

•USD/JPY recorded small gains in the Asian session but and continued with sharp gains in European trade. The pair is unchanged in North American trade
•105.87 is under strong pressure as resistance
•104.99 has switched to support after sharp gains by USD/JPY in the Thursday session
•Current range: 104.99 to 105.87
The Japanese yen has resumed its downward slide on Thursday and posted sharp losses. In the North American session USD/JPY is trading at 105.80. On the release front, there are no Japanese events on Thursday. In the US, the Producer Price Index gained 0.5 percent, beating the estimate. Unemployment Claims remained at 254 thousand, beating expectations. Friday promises to be busy, as the US releases consumer inflation, retail sales and consumer confidence reports.
There was positive news out of the US on Thursday. Inflation showed some strength, as PPI climbed 0.5 percent, ahead of the estimate of 0.3 percent. This marked the highest monthly gain since May 2015. Core PPI followed suit with a gain of 0.4 percent, beating the forecast of 0.1 percent. On the employment front, Unemployment Claims remained at 254 thousand, below the estimate of 263 thousand. Is US inflation on the move? We’ll get a look at CPI numbers on Friday, and a solid release could boost the US dollar.

Sterling rose 1.4% against the dollar

Sterling rose 1.4% against the dollar to $1.330 by late afternoon in Europe after rising around 2% in the wake of the decision. The FTSE 100 and FTSE 250 share indexes fell 0.7% and 0.15%, respectively, in the immediate aftermath of the BOE's announcement. Both were trading slightly higher by late afternoon in Europe.
The Stoxx Europe 600, a broad measure of large European stocks, also recovered most if its losses and was trading up 0.9%.
"The Bank of England stood firm today, surprising markets, which had been bracing themselves for a rate cut," said Dean Turner, economist at UBS Wealth Management. "But this is not the end of the story."
Markets had been expecting a cut, pricing an 80% chance that the central bank will lower its rate to 0.25%. This would have been the first cut since the depths of the financial crisis in 2009.

Canadian currency was boosted by the less dovish outlook

The USD/CAD lost 0.364 percent in the last 24 hours. The pair is trading at 1.2988 after the Bank of Canada (BoC) left interest rates unchanged this morning. The loonie got a boost from the central bank holding rates despite the drop in oil prices that came after the release of U.S. crude inventories.
The Monetary Policy Report published quarterly by the central bank also gave an assessment of the detrimental impact of the Alberta wildfires. The disaster eroded 1.1 percent of the Q2 growth taking with it the forecasted growth and turning it into a contraction.
The Canadian currency was boosted by the less dovish outlook as Governor Poloz continued his optimism about a second half rebound.

GBP/USD ratio is showing limited movement

The British pound has shown movement in both directions on Wednesday but is unchanged over the course of the day. GBP/USD is currently trading at 1.3260. This follows strong gains in the Tuesday session. On the release front, the BOE released its quarterly Credit Conditions Survey. In the US, there are no major releases on the schedule. Wednesday’s highlight is Crude Oil Inventories, with the estimate standing at -2.3 million barrels. On Thursday, the US will release two key events – PPI and Unemployment Claims.GBP/USD ratio is showing limited movement on Wednesday. Long positions have a slight majority (52%), indicative of slight trader bias towards GBP/USD moving higher.

The dollar fell against most currencies Tuesday

The dollar fell against most currencies Tuesday, as the prospect of fresh stimulus from the world's largest central banks pushed investors into emerging markets and other higher yielding assets.
The Wall Street Journal Dollar Index, which measures the dollar against a basket of 16 currencies, was recently down 0.1% to 87.05, amid losses against the pound and emerging market currencies.
Investors expect the Bank of England, Bank of Japan and European Central Bank to announce new stimulus measures in the next few months, as they try to kick-start growth and shield their economies from the fallout of a U.K. departure from the European Union.

Canadian dollar broke through the 1.31

The Canadian dollar broke through the 1.31 price level and is aiming to end lower than 1.30 after the U.S. dollar’s appeal as a safe haven has been reduced following the elections results in Japan will trigger further stimulus and the rise of Theresa May as the only candidate for the U.K. Prime Minister position has calmed markets post Brexit.
The Bank of Canada (BoC) will be thankful for a more normal environment when it releases the interest rate statement on Wednesday, July 13 at 10:00 am EDT. The central bank is expected to hold its rates unchanged at 0.50 percent. The focus for CAD traders will be the publication of the quarterly Monetary Policy Report. Since there is little action forecasted from the BoC in the third quarter the governor Stephen Poloz could try to use dovish language to put downward pressure on the loonie in an effort to boost exports.

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