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July 4, gold futures rose, shaking off the earlier decline caused by stronger-than-expected U.S. non-farm payrolls data. Analysts at Commerzbank said in a report that gold prices are expected to close flat this week after recovering the losses caused by Thursdays employment report. The bank said the report was generally mixed, but the slight drop in the unemployment rate should make the Federal Reserve optimistic that the uncertainty surrounding U.S. tariff policies has not yet dealt a severe blow to businesses. The Federal Reserve may continue to delay rate cuts, which is a negative factor for gold, analysts wrote. However, the main support for gold prices comes first from volatile U.S. policies, which are eroding investor confidence in U.S. assets and boosting safe-haven demand for gold.International Atomic Energy Agency: A team of IAEA inspectors has safely left Iran and returned to its headquarters in Vienna today, following a stop in Tehran during the recent conflict.According to the Wall Street Journal: The United Nations withdrew its inspectors from Iran for security reasons.On July 4, a document showed that Google (GOOG.O) was hit by an EU antitrust complaint. A group of independent publishers complained about its AI overview feature and asked Google to take interim measures to prevent irreparable harm to them. Googles AI overview feature is an AI-generated summary that is displayed above traditional hyperlinks to related web pages and is shown to users in more than 100 countries. Last May, the company began adding ads to the AI overview. Googles integration of artificial intelligence into search is the companys biggest bet, but the move has raised concerns among some content providers such as publishers.Market news: Google (GOOG.O) faces EU antitrust complaints, and independent publishers have filed charges against its AI overview. Publishers seek EU interim measures, claiming irreparable damage to competition. Similar complaints and requests for interim measures have also been submitted to the UK competition regulator.

As the Fed confirms the disinflationary process, the USD/CAD exchange rate may fall to 1.3250

Alina Haynes

Feb 02, 2023 16:05

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The USD/CAD pair resumed its two-day losing run after slipping below 1.3270 in Asia. Following two days of declining US inflation, the Canadian dollar fell on Wednesday.

 

The US Manufacturing PMI (Jan) dropped for a third consecutive month to 47.4, below the consensus estimate of 48.0 and the prior reading of 48.4. The Index of New Orders for Manufactured Goods, which indicates future demand, decreased to 42.5 from 46.1 and 45.1. Fed Chairman Jerome Powell stated in his comments that consumer spending has slowed significantly and that the central bank will now focus on labor cost balance. The US Employment Cost Index (Q4) fell by 1%.

 

The US Consumer Price Index (CPI) and Producer Price Index (PPI) have decreased for three consecutive months, while economic activity and consumer spending have slowed, signaling deflation. Powell stated, "Can now for the first time announce, 'The disinflationary process has begun.'"

 

The market participants' risk appetite has raised the demand for risky assets. After a solid performance on Wednesday, S&P500 futures increased in the Asian morning. The US Dollar Index (DXY) found limits following a decline to about 100.80 amid risk-on market mood. The yield on 10-year US Treasuries has surpassed 3.41 percent.

 

Monthly GDP (Nov) data for the Canadian dollar were 0.1%, above the consensus forecast of flat. Since the Bank of Canada (BoC) ceased policy tightening after increasing interest rates to 4.50 percent, the Canadian economy has not declined on a monthly basis.

 

After plunging to nearly $76, the price of oil is recovering. Black gold dipped on Wednesday after the US Energy Information Administration (EIA) reported 4.14 million oil inventories for the week ending January 27. Because Canada is a major oil exporter to the United States, lower oil prices influence the Canadian Dollar.


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