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On April 11, Iranian First Vice President Aref posted on social media that if Iran negotiates with the "America First" US representatives in Islamabad, Pakistan, it is likely to reach an agreement beneficial to both sides and the world. However, if facing the "Israel First" US representatives, no agreement will be reached, and "we will inevitably continue to defend ourselves more resolutely than ever before, and the world will pay a greater price."Market news: Local authorities said that drone debris crashed at night in an area of an oil depot in Russias Krasnodar Krai, causing a fire that has been extinguished.April 11th - According to foreign media reports, British Prime Minister Keir Starmer has decided to increase UK defense spending at a faster pace than currently planned in an effort to counter potential leadership challenges. The UKs defense spending has fallen behind allies such as Germany, and the government had previously set a target of increasing core defense spending to 3.5% of economic output by 2035. The decision to increase defense spending is essentially finalized, but specific details are still pending. The UK Treasury insists that any significant increase in defense spending must be achieved through tax increases or spending cuts.On April 11, the Japanese government approved an additional subsidy of 631.5 billion yen (approximately US$4 billion) to accelerate Rapiduss entry into the highly competitive field of artificial intelligence chip manufacturing. This funding aims to support Rapiduss business operations for IT company Fujitsu. The Ministry of Economy, Trade and Industry stated on Saturday that the additional funding brings the total amount of government funding and investment in the startup to 2.6 trillion yen (approximately US$16.3 billion) in the current fiscal year (ending March 2027). The ministry said an external committee has inspected Rapiduss wafer fab in northern Hokkaido and approved its technological progress. The newly established chipmaker began developing wafers using 2-nanometer technology last year, aiming to mass-produce cutting-edge semiconductors by 2027 and help Japan reduce its reliance on industry leader TSMC.April 11th - A Bank of America research report indicates that the Eurozone is far more sensitive to oil prices than the United States. The study found that a 10% shock to oil prices would have an inflationary impact of approximately 40 basis points and a corresponding growth impact of over 10 basis points. Both of these effects are roughly twice that in the United States. We believe this result is due to the higher proportion of energy in Europes consumption basket and the regions status as a net importer of oil.

The U.S. dollar fell to a new low in more than two months against the Canadian dollar! Strong rise in oil prices supports the Canadian dollar

Oct 26, 2021 11:01

On Monday (October 11), the U.S. dollar against the Canadian dollar continued Friday’s decline and hit a new low in more than two months near 1.2450.


The Canadian dollar’s rise is due to the performance of crude oil prices. Crude oil is Canada’s main export commodity. Canadian employment data is also better than the US non-agricultural report.

WTI crude oil futures prices have risen to a new high since 2014. The market is worried that as Tropical Storm Pamela moves towards the Gulf of Mexico, it may hit this energy-rich region in the middle of this week and supply will be further interrupted. The positive news that the US stimulus plan and the economy is expected to recover from the epidemic may also be beneficial to oil prices.

Whether it is Canada’s net employment change, unemployment rate or average hourly wages, all of these data exceed the September employment data of the United States, helping the US dollar/Canadian dollar bears continue to gain the upper hand.

The non-agricultural employment population in the United States fell to 194,000 in September, which is expected to be 500,000, but the previous value was revised up to 366,000. At the same time, the unemployment rate fell to 4.8%, the previous value was 5.2%, and the forecast was 5.1%, alleviating some concerns. The average hourly wage increased by 0.6%, which is expected to be 0.4%, and the previous value was revised down to 0.4%.

On the other hand, the Canadian unemployment rate was in line with expectations, recording 6.9%, compared with the previous value of 7.1%. The number of employed people increased by 157,100 people, which is expected to increase by 65,000 people. In addition, the average hourly wage increased by 1.7% in September, which was higher than the previous value of 1.25%.

Although rising oil prices helped the US and Canadian dollar shorts, the US and Canadian markets were closed and concerns about the Fed's balance sheet reduction limit the exchange rate to fall further. In addition, risk aversion supports the dollar's safe-haven demand and also prevents the exchange rate from falling.

If the intraday closes below the 100-day moving average, the US dollar/Canadian dollar will point to near the July 30 low of 1.2423, and further down the 1.24 mark is worthy of attention.

On the upside, the 100-day moving average of 1.2487 and the 200-day moving average of 1.2512 will provide important resistance. Breaking the 200-day moving average will lead to short-term optimism.

(Daily chart of USD/Canadian dollar)

At 15:18 GMT+8, the US dollar was quoted at 1.2448 against the Canadian dollar.

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