EUR/USD 1.08930
0.378%
Gold 3149.75
0.562%
Oil 69.445
-1.383%
USD/JPY 147.761
-1.018%
GBP/USD 1.30421
0.274%
GBP/JPY 192.721
-0.692%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
Japans five-year government bond yield fell 9.5 basis points to 0.98%, the lowest level since February 10.Futures news on April 3, crude oil trend fluctuated narrowly, finished product shipments weakened, fuel oil market players held prices and waited and watched, downstream orders were dominated by rigid demand after phased stocking up, and refinery shipments were lukewarm. It is expected that the overall market trading will be stable today, with a few narrow adjustments.On April 3, CICC pointed out that Trump announced "reciprocal tariffs" on April 2, which exceeded market expectations. Reciprocal tariffs use a combination of "carpet-style" tariffs and "one country, one tariff rate", covering more than 60 major economies. Calculations show that if these tariffs are fully implemented, the effective tariff rate of the United States may rise sharply by 22.7 percentage points from 2.4% in 2024 to 25.1%, which will exceed the tariff level after the implementation of the Smoot-Hawley Tariff Act in 1930. CICC believes that reciprocal tariffs may increase uncertainty and market concerns and aggravate the risk of "stagflation" in the US economy. Calculations show that tariffs may push up US PCE inflation by 1.9 percentage points and reduce real GDP growth by 1.3 percentage points, although they may also bring in more than $700 billion in fiscal revenue. Faced with the risk of "stagflation", the Federal Reserve can only choose to wait and see, and it may be difficult to cut interest rates in the short term. This will further increase the risk of economic downturn and increase the pressure on the market to adjust downward.RBA Financial Stability Assessment Report: US tariffs may have a "chilling effect" on investment and spending.RBA Financial Stability Assessment Report: Australian banks are well capitalized and can absorb large loan losses. It is important that bank lending standards remain sound. Budget pressures are prevalent among Australian households, but are expected to ease. There are concerns that low interest rates will encourage households to over-indebtedness.

As oil prices fall and investors become risk-averse before the BOC meeting, USD/CAD rises to 1.3200

Daniel Rogers

Sep 07, 2022 16:50

截屏2022-09-07 上午11.31.45.png 

 

The USD/CAD has risen for three consecutive trading days, and it is currently trading near 1.3190, which is the weekly high. To appease buyers near the highest levels in two months prior to the Bank of Canada (BOC) Monetary Policy Meeting, the Loonie pair has recently been applauding rising rates and a risk-aversion wave.

 

Declining prices of WTI crude oil, Canada's principal export, further strengthen the USD/CAD exchange rate as speculators anticipate the fifth BOC rate hike in 2022.

 

WTI crude oil prices have dropped to their lowest level since late January, down 1.70 percent to $85.40 as of press time on the back of recession worries and a stronger US dollar. Market perceptions of the latest production cut by OPEC and its partners, including Russia, known collectively as OPEC+, could add to the downward pressure on commodity prices.

 

In addition to the covid-related pessimism in China and the European energy crisis, improved US data strengthened the hawkish Fedbets and boosted the US dollar.

 

In the United States, the ISM Services PMI rose to 56.7 from 55.1 and above market expectations. In contrast to initial expectations of 45.0 and 44.1, the S&P Global Composite PMI and Services PMI both fell to 44.6 and 43.7, respectively. Still, following the news, the US Dollar Index (DXY) rose to a new 20-year high. There is now a 72.0% possibility of a 50 bps rate hike by the Fed in September, according to the CME's FedWatch Tool, up from 57.0% the day before.

 

The three-day surge in rates for 10-year US Treasuries to 3.25 percent is the highest it has been since June 15. The S&P 500 futures have also dropped to a new seven-week low, falling 0.55 percent intraday to 3,890.

 

The stronger U.S. dollar, declining oil prices, and reduced risk appetite should keep USD/CAD bulls optimistic despite the BOC's expected base rate increase of 75 basis points to 3.25 percent. Consolidating recent gains may be possible for the Canadian currency, however, thanks to hawkish comments from the BOC Rate Statement and softer Fedspeak.


Suggestion