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On October 4th, Japans ruling Liberal Democratic Party held its presidential election. The new president will succeed Prime Minister Shigeru Ishiba, who has announced his resignation, and is expected to become the next prime minister. Japanese political scientist Norihiko Narita noted that with frequent presidential changes and the increasingly shaky foundations of the regime, the new LDP president will face multiple pressures. With both houses of the Diet shrinking, restoring political stability has become a core and pressing issue. Currently, Japan faces both the immediate challenge of high prices and the long-term challenges of population decline and economic recession. Furthermore, ensuring political stability is a crucial political issue. Therefore, Japans current political landscape is characterized by the coexistence of short-term and long-term challenges, the interweaving of social and political issues, and the continuous onset of numerous challenges.On October 4th, according to the Shanghai Railway Group, as the National Day and Mid-Autumn Festival holiday enters its midpoint, railway transportation in the Yangtze River Delta remains busy and operating at a high level. The group expects to handle 3.85 million passengers on October 4th, an increase of 146,000 passengers compared to the same period last year, a 3.9% increase. Since the start of the National Day and Mid-Autumn Festival holiday transportation on September 29th, the Yangtze River Delta railway has handled a total of 18.405 million passengers, with an average daily passenger volume of approximately 3.681 million, maintaining a strong holiday travel market.Voting for members of parliament in Japans Liberal Democratic Party presidential election has begun.On October 4th, Hongmeng Intelligent Driving announced that it had received 18,500 pre-orders for its entire lineup during the first three days of the National Day holiday (October 1st-3rd). Among them, 5,800 were for the Wenjie M7, 2,700 for the Zhijie R7, 2,100 for the Shangjie H5, and 1,500 for the Xiangjie S9T.On October 4th, local time, hundreds of protesters gathered outside a U.S. Immigration and Customs Enforcement (ICE) facility in Broadview, Illinois, a suburb of Chicago, clashing with law enforcement officers and resulting in multiple arrests. This follows numerous previous clashes between protesters and ICE officers in the area. Since the Trump administration took office, it has stepped up its crackdown on illegal immigrants. Protesters have repeatedly blocked vehicles transporting detainees to the ICE facility in Broadview. The U.S. government has responded by stating that it will not tolerate rioters using violence to prevent law enforcement.

With Weakening Oil Price And Negative Sentiment, USD/CAD Bulls Approach Monthly Barrier Around 1.3480

Daniel Rogers

Feb 17, 2023 14:36

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USD/CAD surpasses 1.3450 on Friday morning as bulls hold control for a fourth consecutive session on broad US Dollar strength and falling WTI crude oil prices. In doing so, the Loonie pair validates the dovish language of Bank of Canada (BoC) officials in contrast to the hawkish discourse of Federal Reserve (Fed) policymakers and favorable US statistics.

 

Recently in Asia, BoC Deputy Governor Paul Beaudry noted, "The floating Canadian dollar allows the bank to chart a different route than its trading partners and to focus on setting interest rates." The same confirms the dovish perspective of the Canadian central bank, as BoC Governor Tiff Macklem previously confirmed when he declared on Thursday, "There are indications that our interest rate increases are beginning to cool demand and restore equilibrium to our overheated economy.

 

In contrast, Loretta Mester, head of the Cleveland Fed, alluded to recession concerns while repeating her past support for the highest interest rates. James Bullard of the Federal Reserve Bank of St. Louis noted, "Continued policy rate increases can help lock in a disinflationary trend in 2023, notwithstanding continuing expansion and solid labor markets, by maintaining low inflation expectations."

 

Since June, when it rose 0.7% month-over-month, the US Producer Price Index (PPI) for January has gotten the most attention from USD/JPY purchasers. The improvement in US Initial Jobless Claims for the week ending February 10 (194K as opposed to 200K expected and 195K previously) was also positive for the pair. In contrast, the fall in Housing Starts in January and the Philadelphia Fed Manufacturing Survey in February appear to have received attention.

 

At the time of writing, the price of WTI crude oil had registered small gains and reduced weekly losses to approximately $78.40. Given Canada's reliance on WTI exports, the weekly decrease in the price of black gold is positive for USD/CAD bulls.

 

The USD/CAD currency rate is influenced by geopolitical issues in addition to central bank debates, US statistics, and Oil's movement. But, the recent escalation of tensions between the United States and China, as well as Russia's refusal to back down from its attack on Ukraine, weigh on risk appetite and drive the Loonie-Dollar pair due to safe-haven demand for the Dollar. During an interview with NBC News, Vice President of the United States Joseph Biden launched shots at his Chinese counterpart and expressed his hopes for a chat with the Chinese leader. I believe that fundamentally severing connections with the United States and myself is the last thing Xi would desire "President Biden cited Reuters in his statement.

 

As a result of these tactics, 10-year US Treasury note rates have reached their highest level since December 30, 2022, climbing 3.5 basis points to 3.87 percent as of press time. In a similar vein, the rates on two-year US Treasury bonds end Thursday around 4.64 percent, the highest level since November 2022, and reach 4.65 percent at the absolute latest. In addition, Wall Street closed in the red, while intraday S&P 500 Futures declined 0.30 percent as of press time.

 

Although the Oil price licking its wounds, the risk-averse mindset and hawkish Fed statements, in contrast to the dovish BoC, can keep the USD/CAD pair firmer.


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