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On April 6, UBS released a report stating that we believe that European economic growth will also slow, although the slowdown is smaller than that of the United States. If tariffs remain at their current level throughout the summer, economic growth may be 50-100 basis points lower than if the tariffs are lifted. As for inflation, the EUs retaliatory tariffs may lead to rising price pressures in the short term, but we believe that the medium-term impact of the trade war may suppress inflation in Europe. Coupled with weak economic growth, by June, the European Central Bank may cut interest rates to 2% below our previous expectations.Medics have been called to several Kiev districts after Russian missile strikes on the Ukrainian capital, the mayor of Kiev said.April 6th news: At about 5 am local time on the 6th, multiple explosions were heard in the Ukrainian capital of Kiev. The Kiev Military Administration and Kiev Mayor Klitschko said that the air defense system was in operation. The Ukrainian Air Force issued a missile attack danger warning. Earlier, the Ukrainian army said that Russia launched an air strike on Kiev.April 6, ING Bank: The rush to ship gold to the United States will subside after gold is excluded from the new tariffs. The gold sell-off should be short-lived, and escalating trade actions may continue to boost safe-haven buying. So far, Trumps unpredictable trade policy has been one of the key drivers of gold in 2025. We believe that uncertainty over trade and tariffs will continue to boost prices. In addition, another key driver, central bank purchases, may continue.The Ukrainian military said Russia launched an airstrike on Kiev.

As Investors Anticipate a 25 Basis Point Fed Rate Hike, USD/CAD Corrects To Near 1.3700

Daniel Rogers

Mar 22, 2023 15:17

USD:CAD.png 

 

The USD/CAD pair is evidencing a corrective movement after failing to sustain a recovery above 1.3740 during the Asian session. Following a decline in Canada's inflation data, the Canadian dollar rebounded strongly from Monday's level of 1.3660. The falling Canadian Consumer Price Index (CPI) data confirmed that the Bank of Canada (BoC) could maintain its current policy stance.

 

Governor Tiff Macklem of the Bank of Canada maintains the status quo because he believes that the monetary policy is sufficiently restrictive to achieve price stability. However, BoC Macklem has left the door open for additional increases if the plan for reducing inflation fails.

 

Statistics Canada reported that the monthly inflation rate has increased by 0.4%, which is less than both the consensus estimate of 0.6% and the previous release of 0.5%. The headline CPI declined from 5.4% (consensus) and 5.8% to 5.2%. (previous release). The annual core CPI, which excludes the costs of fuel and food, decreased to 4.7% from 5.0%, but remained above the 4.4% forecast. The Bank of Canada, which has already increased interest rates to 4.5%, found the overall decline in inflation to be quite impressive.

 

In the interim, S&P500 futures are performing unfavorably after two days of intense buying. The odds favor the Federal Reserve increasing interest rates by 25 basis points (bps) for the second consecutive meeting. (Fed). As concerns of banking sector turmoil persist, the US Dollar Index (DXY) struggles to maintain its position above 103.20. In addition, analysts from UBS believe that tighter credit standards, economic contraction, and falling inflation could prompt the Fed to reduce interest rates this year.


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