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On January 18, according to the U.S. Capitol Hill newspaper, before Mondays inauguration, U.S. President-elect Trump "won a battle" because the Capitol will raise the American flag to its highest level instead of lowering it to half-mast on the day of the inauguration. Trump had previously been angry about the idea of lowering the flag to half-mast in memory of former President Carter. Carter died on December 29, and Biden announced that he would lower the flag to half-mast for 30 days. It was U.S. House Speaker Johnson who came to the rescue and dispelled concerns that Trumps second term would start with a "half-mast mourning" scene. Earlier this week, Johnson wrote on social media that next Monday, "the flags at the Capitol will fly at full flag to celebrate our countrys unity after the inauguration of the 47th President Donald Trump." Johnson pointed out that the flag would be lowered to half-mast again the day after the inauguration to commemorate Carter.According to the Ukrainian Pravda: The battlefield analysis agency DeepState said that the Russian army has made progress in several settlements in Kharkiv and Donetsk.According to the Ukrainian National News Agency: Poland plans to send a defense industry delegation to visit Ukraine.According to the Jerusalem Post: A Hamas official claimed that mediators involved in the hostage and ceasefire negotiations included a clause allowing Israel to resume military operations in Gaza if Hamas violates the agreement.Russian Ministry of Defense: Russian air defense system shot down 46 drones in Russia at night.

USD/CAD encounters resistance near 1.3580 as focus shifts to FOMC minutes

Daniel Rogers

Jan 03, 2023 15:20

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After failing to surpass the immediate resistance level of 1.3580, the USD/CAD pair is exhibiting some volatility in the Tokyo morning session. The Canadian dollar is attracting bids due to a boost in investor risk appetite and a rise in oil prices.

 

As investors believe that the US Dollar Index will continue to underperform, risk-sensitive currencies are gaining traction. After giving up the crucial support level of 103.50, the USD Index saw a significant fall on Friday. In the interim, S&P500 futures have began trading on a positive note, signaling a reduction in risk.

 

This week, the Federal Open Market Committee (FOMC) report will be the focal point of attention. The minutes of the Federal Open Market Committee will explain why the Federal Reserve raised interest rates by 50 basis points (bps) in December's monetary policy meeting (Fed).

 

As they preview this week's US events, TD Securities analysts believe that the FOMC's December policy meeting minutes will shed fresh light on the Fed's policy outlook for 2023. According to analysts at TD Securities, by the time of the FOMC meeting in May, the terminal rate will be between 5.25 and 5.50 percent.

 

Investors will eagerly scrutinize the Canadian employment data that will be released on Friday. Analysts at TD Securities expect an 8,000 gain in employment in December as the labor market begins to deteriorate. The unemployment rate may decline to 5.2%, and the annual wage range may rise to 5.5%. A rise in pay growth may keep inflation at elevated levels.

 

In the interim, the price of oil has risen to over $80.50 per barrel as investors anticipate a drop in Covid-19 cases in China, which will restore economic development. Notably, Canada is the United States' leading oil exporter, and higher oil prices strengthen the Canadian Dollar.


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