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On January 27th, European Central Bank (ECB) Governing Council member Kocher stated that given the unstable global situation, particularly regarding trade, the ECB needs to retain all feasible options regarding interest rates. While officials believe they are currently in a "good position," they still face "very high" uncertainty. He emphasized the importance of having sufficient options in both directions. Monetary policy must be able to respond quickly and decisively to any emerging risks. Kocher expressed a desire to be able to react swiftly to any unforeseen circumstances. "We saw this last week when there was an additional threat of tariffs. So we must be cautious. This could have some consequences and could also impact European economic development."SMIC: The company will disclose its fourth quarter 2025 results after the trading session on February 10, 2026.January 27th - Nick Timiraos, the "Federal Reserve mouthpiece," reports that Federal Reserve officials are expected to keep interest rates unchanged this week for the first time since three consecutive rate cuts in September. The question is, what would prompt the Fed to cut rates again? The answer depends on which risk materializes first: a collapse in the labor market, or a significant drop in inflation towards the 2% target. Neither has occurred since the last meeting in December. As a result, the committee remains on the sidelines despite significant political pressure from the White House. Most officials still believe a rate cut is possible later this year, but there is disagreement on when data will support it.January 27th - With only six months remaining until July 1st, 2026, the implementation of Article 75 of the National Medical Products Administrations "Special Provisions on the Registration Management of Traditional Chinese Medicines" is entering its final window. This provision, known in the industry as the "life-or-death clause" for traditional Chinese medicines, clearly states that after three years from July 1st, 2023, any traditional Chinese medicine whose instructions still indicate "not yet clear" will not be approved for re-registration. This means that over 70% of the approximately 57,000 valid approval numbers for traditional Chinese medicines currently in use in China, due to safety information labeling issues, will face elimination. A regulatory-driven, in-depth cleanup of the traditional Chinese medicine industry has officially entered its crucial stage. The core of this new regulatory policy is to completely end the long-standing era of "not yet clear" instructions for traditional Chinese medicines, forcing drug holders to address the shortcomings in post-market safety data.The UK Financial Conduct Authority (FCA) will develop a series of recommendations based on feedback from the AI review, which will be submitted to the FCA committee in the summer of 2026.

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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