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Japans Topix index extended its losses to 1%.On September 17th, Huaweis official Weibo account announced the release of its Top 10 Technology Trends for an Intelligent World by 2035 on September 16th, noting that by 2035, total computing power will increase 100,000-fold, ultimately spurring the rise of new computing. Huawei believes that AGI will be the most transformative driving force over the next decade. With the development of large models, AI agents will evolve from execution tools to decision-making partners, driving industrial revolutions. Communication networks will connect more than 9 billion people to 900 billion agents, enabling the transition from the mobile internet to the internet of agents. Currently, human-computer interaction is shifting from graphical interfaces to natural language and evolving towards multimodal interaction that integrates all five senses.Futures data from September 17th: Spot gold prices surged above the 3,700 mark overnight, with COMEX gold futures rising 0.23% to $3,727.50 per ounce, and SHFE gold futures closing up 0.19%. Expectations of a Federal Reserve rate cut, a weakening dollar, and geopolitical uncertainty are all contributing to golds performance. Focus is on the Federal Reserves September meeting and the subsequent Quarterly Economic Projections (SEP). The US dollar continued to weaken on Tuesday, with the US dollar index falling 0.74% to a low of 96.54, hitting a near two-month low. Furthermore, the dollar fell 0.9% against the euro, reaching its lowest level since September 2021. Regarding economic data, US retail sales for August, released on Tuesday, rose 0.6% month-over-month, exceeding expectations of a 0.2% increase. The previous reading was revised from 0.5% to 0.6%, demonstrating resilience in consumer spending. The Federal Reserve held its meeting early Thursday morning, and a rate cut is all but certain. With the US Presidents newly nominated Fed Governor, Milan, participating in the FOMC meeting, the published dot plot is expected to show a more dovish tone, with the number of rate cuts for 2025 expected to fluctuate between two and three. Furthermore, continued pressure from the White House on Powell and other governors is crucial. Concerns about the Feds independence may continue to exacerbate market volatility.According to the Wall Street Journal: Eli Lilly (LLY.N) will invest $5 billion to build a factory in Virginia, USA.Japanese Ministry of Finance: Japans exports to the United States fell 13.8% year-on-year in August; exports to the European Union increased 5.5% year-on-year in August.

USD/CAD rebounds to 1.2950 on lower oil, risk aversion ahead of Powell's Fed speech, and BOC inflation data

Alina Haynes

Jun 22, 2022 14:48

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During Wednesday's Asian session, USD/CAD bulls return to the table following a two-day vacation as the price refreshes its intraday high over 1.2950. In doing so, the Loonie-U.S. dollar pair reflects a higher U.S. dollar with the market's risk-averse mindset anticipating Fed Chair Jerome Powell's speech. The drop in oil prices, Canada's most significant export commodity, helps to the upswing.

 

With the Fed's aggressiveness and the US recession raising concerns, the US Dollar Index (DXY) achieves its first daily gain of the week at approximately 104.60. Joe Biden, the Vice President of the United States, and Janet Yellen, the US Treasury Secretary, both tried to reassure investors that a recession was not imminent. US economy will not return to past decade of stable growth, employment and inflation, according to Thomas Barkin, president of the Federal Reserve Bank of Richmond, as reported by Reuters.

 

In contrast, WTI crude oil prices have touched a new monthly low of around $108.00, a fall of 1.5 percent as of press time, as US President Biden argues for reduced energy costs. After U.S. President Joe Biden attempted to lower rising fuel costs by putting pressure on large U.S. firms, oil prices dipped in the early trade of Wednesday, as reported by Reuters. Notable is the fact that Biden plans to suspend the federal gas tax to lower energy prices.

 

Canadian retail sales rose by 0.9 percent in April, above expectations of 0.8 percent and an earlier upwardly revised 0.2 percent, according to data released on Tuesday. There was a two-year low in the number of annualized existing home sales in the US. Chicago Fed's National Activity Index fell to 0.01 in May from an upwardly revised 0.04 in April, further demonstrating the weakening of the economy.

 

Ahead of Fed Chair Jerome Powell's key testimony, the USD/CAD is predicted to witness additional gains due to the recent risk-aversion wave that has backed the US dollar's recovery advances and has also favored oil bearish. Important to follow for May is the Bank of Canada's (BOC) Consumer Price Index Core, which is predicted to grow 5.9 percent year-over-year compared to 5.7 percent in April. An rise of 1% is expected in March, up from 0.6% the previous month, according to expectations for the Canadian Consumer Price Index (CPI).

An Examination of the Technical Aspects

Despite the current rebound, purchasers of USD/CAD remain cautious because the quotation has maintained the previous day's break to the downside of an ascending trend line from June 8th. (now 1.3090).


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