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French prosecutors say the Russian captain of the oil tanker with ties to Moscow has been released.June 4th - According to Saudi Arabias Al Arabiya television, citing sources, the agreement to unfreeze Iranian funds has entered its final stage, with the main obstacle being the mechanism for handling some of the frozen funds. A proposal to establish a special fund to hold frozen Iranian assets is under discussion. Furthermore, Trump informed the mediators that he opposes releasing funds to Iran before a formal agreement is signed. The mechanism of the special fund could allow for the gradual release of funds under international supervision, potentially bridging the gap between US concerns about Irans immediate access to cash and Irans demands for tangible economic benefits. Giuseppe Dellamotta, an analyst at the US financial website InvestingLive, stated that the dispute over frozen assets has been a recurring theme throughout the negotiations. Reports in recent weeks indicate that Iranian negotiators have been pressuring for the unfreezing of billions of dollars held overseas (particularly in Qatar), viewing this issue as a key test of Washingtons willingness to provide substantial sanctions relief. Despite significant differences remaining, the latest reports suggest that negotiators are increasingly focusing on technical implementation issues rather than fundamental political disagreements. Diplomats believe that if the issue of the asset freeze mechanism can be resolved, the two sides may be able to reach a formal agreement, which would provide limited economic assistance to Iran while maintaining the United States leverage in future negotiations on more sensitive issues.Eurozone retail sales fell 0.4% month-on-month in April, the largest drop since October 2024.Eurozone retail sales fell 0.4% month-on-month in April, compared with a forecast of -0.3% and a revised previous reading of 0.8% (from -0.10%).Eurozone retail sales rose 1% year-on-year in April, below the expected 0.3% and the previous figure revised from 1.20% to 2.1%.

USD/CAD declines to 1.3500 on firmer Oil prices, BoC concerns over US inflation, and Fed Minutes

Daniel Rogers

Apr 10, 2023 14:35

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The USD/CAD maintains losses close to 1.3500, shattering a four-day winning trend, as traders brace for key Easter Monday data/events on major bourses. However, the recent decline in the Loonie-U.S. dollar exchange rate may be due to the increase in the price of WTI petroleum oil, Canada's primary export. In contrast to the recent increase in ardent Fed forecasts, the Bank of Canada's (BoC) dovish bias poses a challenge to pair sellers.

 

After increasing for three consecutive weeks, WTI crude oil prices gain 0.61 percent intraday near $80.00. Recent increases in the price of black gold may be due to geopolitical concerns surrounding China and Taiwan. In addition to the supply cut by OPEC+ and the faltering US dollar, the energy benchmark is sustained by the supply cut by OPEC+ and the weakening US dollar.

 

However, the US Dollar Index (DXY) has fallen for three consecutive weeks and is under pressure near 102,000.

 

Fears of higher Fed rates versus inaction from the Bank of Canada (BoC) grew after the upbeat US Jobs report versus the lack of significant positives in the March Canadian jobs report.

 

As a result, the CME's FedWatch Tool indicates a 69% chance of a 0.25 basis point rate hike in May, up from 55% prior to the US employment report.

 

Canada's headline Net Change in Employment increased to 34.7K in March from 21.8K in February, compared to the market consensus of 12K, while the Unemployment Rate came in at 5% versus the analysts' estimate of 5.0%. During the specified month, the Participation Rate decreased to 65.6% from the expected and previous rate of 65.7%. In addition, the average hourly wage fell 5.2% year-over-year in March, down from 5.5% in February.

 

In contrast, the US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) increased by 236K in March, the lowest increase since January 2021 (considering revisions), compared to the expected 240K and the previous 330,000. Additionally, the unemployment rate fell from 3.6% to 3.5%, while the labor force participation rate rose from 62.6% to 62.6%. The annual wage inflation rate decreased from 4.6% to 4.2%, below market expectations of 4.3%.

 

Futures on US equities ended higher, but yields remain under pressure ahead of the crucial BoC monetary policy meeting, US inflation, and Fed Minutes. Given the dovish concerns from the Bank of Canada (BoC) and the likely hawkish comments in the FOMC Minutes, the USD/CAD may see additional gains, barring any unexpected developments.


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