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On April 4, according to people familiar with the matter, US Republicans are considering creating a new tax bracket for people with incomes of $1 million or more to offset part of the cost of the tax bill, which is in stark contrast to the Republican Partys decades-long opposition to tax increases. People familiar with the matter said the new top tax rate would be between 39% and 40%. Trump administration officials and allies on Capitol Hill are beginning to draft a tax plan, hoping to pass it in the coming months. In addition, Republicans are also considering raising the top tax rate on incomes over $626,350 from the current 37% to 39.6%, which means the top tax rate will return to the level set by former President Obama.US President Trump: Britain is happy with US tariffs.Foreign central banks held U.S. Treasuries worth -$1.76 billion in the week ending March 27, compared with -$14.896 billion in the previous week.Trump trade adviser Navarro: Tariffs are to protect the American people and increase revenue.April 4th, as a new wave of tariffs upends global markets, the dollar has wiped out all of its gains since Trump won the election last November. "The dollar bear market has arrived and its roaring," said Paresh Upadhyaya, director of fixed income and currency strategy at Amundi. He added that the dollar could fall 10% this year as the United States "teeters on the brink of recession." This is in stark contrast to earlier this year, when Trumps policy plans such as tax cuts and tariffs were seen as a reason to bet on a rebound in the dollar. In February, U.S. Treasury Secretary Bessant said Trumps policies were "completely consistent" with a strong dollar, confirming the governments strong dollar stance. "We may be in the early stages of a structural sell-off in the dollar," said Ed Al-Hussainy, strategist at Columbia Threadneedle Investment.

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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