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January 16th news, at 20:00 local time on January 15th, US President Biden delivered his farewell speech as president in the Oval Office of the White House.US President Biden: The system of checks and balances maintains American democracy.The Bank of Korea unexpectedly kept its interest rate unchanged at 3%, while market expectations were for a drop to 2.75%.On January 16, the worlds largest asset management company BlackRock (BLK.N) announced on Wednesday that its fourth-quarter profit jumped 21%, the stock market boom increased commission income, and its managed assets also hit a record high of $11.6 trillion. Its assets in the same period last year and the third quarter were $10.01 trillion and $11.48 trillion, respectively. BlackRocks long-term funds net inflows in the fourth quarter were $201 billion. The overall net inflow of funds reached $281.4 billion, higher than $95.6 billion in the same period last year.On January 16, CICCs research report stated that the month-on-month increase in the US core CPI in December slowed from 0.3% last month to 0.2%, and the year-on-year growth slowed from 3.3% to 3.2%, both lower than market expectations. The non-rental service inflation (supercore), which the Federal Reserve is most concerned about, has fallen, and core goods and rental inflation have remained mild, with no signs of re-acceleration. Despite strong non-farm payrolls last Friday, inflation continued to slow, indicating that the economy has not shown signs of overheating. This is good news. U.S. Treasury yields fell and U.S. stocks rebounded. Maintaining the previous judgment that the United States is expected to achieve a "Goldilocks" economy, the market may have overestimated the upside risks of U.S. inflation. The Federal Reserve is likely to skip the interest rate cut in January, and there is still a possibility of a rate cut in March. Maintain the view that there may still be two interest rate cuts in the first half of the year.

USD / CAD Price Analysis: As US Inflation decelerates, the recovery move to approximately 1.3700 appears vulnerable

Daniel Rogers

Mar 15, 2023 11:45

 USD:CAD.png

 

After declining to approximately 1.3650, the USD / CAD pair has made a less certain rebound move. A deceleration in U.S. inflation suggests a further decline in demand for safe-haven assets in the aftermath of the Silicon Valley Bank (SVB) failure, putting the Loonie asset in jeopardy near 1.3700.

 

According to CNBC, Moody's Investors Service has lowered its prognosis on the entire banking system from stable to negative, causing S&P500 futures to decline in the early Asian session. The situation reveals a minor pessimism in the general risk-taking disposition.

 

As US inflation continues to decline, the Federal Reserve (Fed) will likely continue to raise interest rates at a slowing rate. Inflation in the United States is falling in accordance with expectations, so Fed Chairman Jerome Powell should not hurry to tighten monetary policy further.

 

USD / CAD has recovered after detecting a cushion close to the horizontal support derived from the March 1 high at 1.3659 on a two-hour scale. The dearth of conviction and fortitude in the US Dollar's recovery increases the likelihood of further asset losses.

 

The 20-period Exponential Moving Average (EMA) at 1.3710 may continue to act as a barrier for the US Dollar.

 

In the interim, the Relative Strength Index (RSI) (14) has protected the decline into the bearish 20.00 to 40.00 range. However, the negative bias is still evident.

 

A conclusive breach of the low of March 14 at 1.3652 would push the currency toward the low of March 07 at 1.3600, then the low of March 03 at 1.3555.

 

In an alternative scenario, a confident recovery above the high of March 14 at 1.3750 would propel the major toward the highs of March 13 above 1.3800 and March 09 at 1.3835.


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