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Commerzbank’s Michael Pfister argues that recent Canadian labour data and the Bank of Canada’s latest decision suggest domestic monetary policy is unlikely to reverse the downtrend in USD/CAD. Markets have largely priced out further rate hikes, and he expects any sustained move to lower USD/CAD levels in coming weeks to hinge mainly on continued US Dollar weakness.BoC stance and cross rate drivers”The latest labour market figures have made it clear that a reversal of the trend towards lower USD/CAD levels is unlikely to originate from Canada.””Whilst interest rates were expected to remain unchanged, policymakers gave no indication of any imminent…
One hundred dollar US currency paper note over a stack heap of 500 Rupees Indian currency flat lay over gray white background for foreign exchange, forex posters with blank copy space. | Photo Credit: desifoto The rupee declined 6 paise to 96.31 against the US dollar in early trade on Thursday amid volatility in global crude oil prices and a stronger greenback with the West Asia crisis showing no signs of abating.FII outflows continued to weigh on the local unit while a positive start to the day at the domestic equity markets provided support, according to forex traders.At the interbank…
Gold (XAU/USD) attracts fresh sellers during the Asian session on Thursday and drops back closer to the previous day’s swing low, around the $4,025 region in the last hour. Despite soft US Consumer Price Index (CPI) and Producer Price Index (PPI) reports, elevated crude oil prices keep the possibility of a US Federal Reserve (Fed) interest rate hike later this year firmly on the table. This offers some support to the US Dollar (USD) and drives flows away from the non-yielding bullion.The US Bureau of Labor Statistics (BLS) reported on Wednesday that the PPI unexpectedly fell 0.3% in June after…
The U.S. dollar hovered near a one-month low on Thursday, as soft inflation data reinforced bets that the Federal Reserve can stay patient on interest rate hikes, while escalation in Middle East hostilities added upside risk to the inflation outlook. The greenback slipped against the Japanese yen for the third trading session, by 0.1% to 162.075 yen. The euro was 0.1% higher at $1.1472, its strongest in a month. Sterling held near a two-month high at $1.354 on market expectations that Britain’s incoming prime minister will pick a fiscally conservative finance minister.The Australian and New Zealand dollars were both down…
United Overseas Bank’s Quek Ser Leang and Lee Sue Ann highlight a sharp USD/CNH drop to 6.7691, shifting the short-term bias to the downside. They see scope for further weakness, though the 6.7600 support is unlikely to be reached immediately. Over 1-3 weeks, the pair is expected to trade with a downside bias toward 6.7600, while a move above 6.7860 would negate the bearish momentum.Offshore Yuan strengthens as Dollar slips”24-HOUR VIEW: We did not expect USD to drop sharply to 6.7691 (we had expected range-trading). The rapid increase in momentum suggests further USD weakness, even though the major support at…
Federal Reserve (Fed) Chair Kevin Warsh said on Wednesday that current inflation pressure will not be permanent, while acknowledging that the latest inflation measures remain unsatisfactory. Warsh made the remarks while testifying at the Semiannual Monetary Policy Report before the US Senate Committee on Banking, Housing and Urban Affairs.Key takeaways:Inflation will not be permanent.Monetary policy has contributed to inflation.The labor market remains in good shape.It is unclear whether previous interest rate cuts were responsible for the labor market’s resilience.Warsh is not satisfied with any of the current inflation measures.The Federal Reserve is expected to receive taskforce briefings in early September.The…
Commerzbank’s Volkmar Baur notes that softer US inflation has reduced expectations for Federal Reserve rate hikes and pressured the US Dollar. June headline and core inflation fell more than consensus, leading markets to price out roughly half a hike by year-end. Baur argues that improving productivity and AI-related investment support a wait-and-see Fed stance, keeping the Dollar under pressure, though higher Oil prices may slow adjustment.Lower inflation shifts Fed pricing”The lower inflation figures also had an impact on the fx market. On a trade-weighted basis, the US dollar lost about 0.3% yesterday, and it also gave up a similar amount…
Positive sentiment in the domestic equity markets and a weaker greenback cap a sharper decline in the rupee | Photo Credit: SANJAY SHARMA The rupee fell 16 paise to close at 96.32 (provisional) against the US dollar on Wednesday, weighed down by heightened tensions in West Asia and a rise in global crude oil prices.However, positive sentiments in the domestic equity markets and a weaker greenback prevented a sharper decline in the local unit, forex traders said.At the interbank foreign exchange market, the rupee opened at 96.12 and traded in the range of 96.04-96.32 during the session. It settled at…
ING’s Francesco Pesole expects the Bank of Canada to keep rates at 2.25%, with limited incentive to push back against modest December tightening pricing. He sees June CPI potentially falling below 3.0% as petrol prices drop, while core remains near 2.0%. Source
The rupee rose 5 paise to 96.11 against the US in early trade on Wednesday amid heightened tensions in West Asia and a weaker greenback.Higher crude oil prices and FII outflows prevented a sharper rise in the local unit while a positive opening in the domestic equity markets lent support, forex traders said.At the interbank foreign exchange market, the rupee opened at 96.12 and inched up to 96.11, up 5 paise from its previous close.The unit depreciated 48 paise to close at 96.16 against the US dollar on Tuesday.Iran on Wednesday threatened to halt all energy exports from West Asia…