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On April 28, the Russian Foreign Ministry announced on the 27th an expansion of the list of European personnel banned from entering Russia. This expansion includes individuals from European organizations and countries involved in military aid to Ukraine and those imposing sanctions on Russia, in response to the EUs approval of a new round of sanctions against Russia. The Russian Foreign Ministry stated that the EU recently approved the 20th round of sanctions against Russia, attempting to continue pressuring Russia. Therefore, in accordance with relevant Russian federal laws, Russia has "significantly expanded the list of European institutions, EU member states, and representatives of European countries pursuing Brussels anti-Russian policies who are prohibited from entering Russia."On April 28th, it was learned that Pakistan stated on the 27th that Afghan officials claims of a Pakistani attack in Kunar province were false. Pakistan also stated that whenever and wherever it strikes terrorist strongholds and facilities within Afghanistan, it will, as in the past, issue prior public statements, assume full responsibility, and provide precise evidence to prove that the targets are terrorist support facilities. Afghan government deputy spokesman Hamdullah Fytrat said on social media on the 27th that Pakistan attacked eastern Afghanistans Kunar province that day with mortars and rockets, resulting in 4 deaths and 70 injuries.A U.S. judge has ordered the temporary detention of the suspect in the White House reporters dinner shooting, with a detention hearing scheduled for Thursday.Citi/YOUGOV survey: UK inflation expectations for the next year are 5% in April, compared to 5.4% in March.Court transcripts show that the suspect in the White House correspondents dinner shooting is accused of attempting to assassinate the US president.

USD/CAD Trades at a Flat Level Following Volatile Trading and Rising US Treasury Yields

Drake Hampton

Apr 06, 2022 10:16

Insights

  • The dollar fell as additional penalties against Russia weighed on the Loonie.

  • Benchmark rates increased as the Federal Reserve pursued a more aggressive rate hike strategy.

  • Due to the new penalties, gold and silver prices remained rather stable.

  • As European countries ponder further measures, oil prices continue to rise.

 

Despite a volatile trading session, the dollar maintained its strength as higher oil prices bolstered the commodity-linked Loonie. The yield on ten-year government bonds increased to 2.56 percent, the highest level since May 2019. Benchmark rates increased several basis points following Fed Governor Brainard's statement that the Fed must pursue a more aggressive stance to contain inflation. Commodity-linked currencies such as the Loonie increased in value as a result of higher oil prices and good economic indicators. New sanctions against Russia continue to benefit silver and gold prices. On the potential of fresh Russian sanctions, oil prices continued to increase. Investors are awaiting the release of the minutes from the most recent FMOC meeting on Wednesday.

 

Today, the US released its February trade balance. Actual balance of -$89.2 billion was lower than predicted at -$88.5 billion. The reading stayed relatively stable compared to the previous month, indicating a record deficiency. Exports increased by 1.8%, while imports jumped by 1.3 percent. In the following months, the Russia-Ukraine war may limit demand for US exports.

Technical Evaluation

The USD/CAD exchange rate remained unchanged following a recovery from the downward pressure caused by increased oil prices, which supported the Loonie. However, losses should be contained as a result of the Fed's more aggressive rate hikes. The pair remains below the key level of 1.25 and may be driven lower as additional penalties against Russia increase. Resistance is located near the 10-day moving average, which is now at 1.25. Near today's lows near 1.24, support is seen. A break below support would reveal the daily low of 1.2387 from November 10th, signaling further downward pressure. The short-term momentum shifted to the upside when the fast stochastic crossed above the buy signal.

 

Although the MACD line generated a crossover sell signal, the medium-term momentum is negative but favorable. When the MACD line (the 12-day moving average minus the 26-day moving average) passes the MACD signal line, this scenario occurs (the 9-day moving average of the MACD line).

 

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