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On August 30th, Finnish President Alexander Stubb stated on Saturday that he does not believe Russia will attack NATO, "the worlds most powerful military alliance." However, in an interview with the German newspaper Bild, he said NATO should "prepare for the worst to prevent it from happening." Stubb pointed out that Russia has lost more soldiers than it recruited and judged that Russia may mobilize more troops in the fall, although this move would have "domestic political implications." He said Moscow is in an "increasingly complex situation," but emphasized that Russia will not end the conflict due to an economic downturn. He stated, "Never underestimate how much economic hardship the Russians can withstand."On August 30th, Yonhap News Agency reported that US President Trumps financial disclosures revealed he traded shares of e-commerce giant Coupang Inc. twice in June through a fund manager. Meanwhile, tensions between the US and South Korea continue to escalate over South Koreas regulatory handling of the massive data breach at the US-listed e-commerce giant. In July, the US House Judiciary Committee released a temporary staff report accusing the South Korean government of carrying out a "discriminatory attack" against Coupang and all other US companies, stating that Coupang has been a "consistently targeted entity."On August 30, Iraqi Prime Ministers Security Advisor Qassem Araji stated in a recent interview with Al Jazeera that Iraq maintains "good relations" with both Iran and the United States and seeks to act as a "bridge" for communication among all parties to reach an agreement that safeguards the interests of the entire region. He added that Iran has emphasized the necessity of eliminating extremist groups within Iraq.On August 30th, SK Hynix CEO Guo Luzheng stated that the company remains open to further investment in the US semiconductor industry, while predicting that the global memory chip shortage will continue until the end of 2030. "We are always open to more investment, but no decisions have been made yet," Guo Luzheng said. He stated that SK Hynix is searching globally for potential sites that can meet its R&D and testing needs, noting that electricity, water resources, and government incentives are key considerations. Guo Luzheng said, "We are open to any location that can provide sufficient infrastructure and resources." He also expressed hope that the company will bring "more good news" to the US artificial intelligence industry in the future.Iraqi Prime Ministers Security Advisor Qassem Araj: Iraq seeks to become a "bridge" between Iran and the United States.

As US Inflation Data Looms, the USD/CAD Tracks Oil's Failure To Move Above 1.3300

Alina Haynes

Feb 14, 2023 14:44

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The USD/CAD shows the market's caution as traders anticipate Tuesday morning's release of the US Consumer Price Index (CPI) for January. After a two-day decline, the Canadian dollar-U.S. dollar pair holds a position near 1.3330.

 

However, the most recent decrease may be a result of the US Dollar's inability to maintain its earlier weekly gains in the face of falling US Treasury bond yields. Nonetheless, the declining price of Oil, Canada's principal export, and the Federal Reserve's (Fed) hawkish pronouncements are enticing USD/CAD bulls.

 

Concerns about additional releases from U.S. strategic petroleum reserves have kept the price of WTI crude oil below $79,50 a barrel (SPR). According to Organization of the Petroleum Exporting Countries (OPEC) Secretary-General Haitham Al Ghais, the price of black gold disregards earlier reports anticipating a supply constraint as a result of Russia's threat to reduce output and the anticipation of increasing energy demand.

 

Fed Governor Michelle Bowman reportedly told Reuters that the Federal Reserve will continue to raise interest rates until they reach a suitable level to return inflation to the target rate. President of the Federal Reserve Bank of Philadelphia, Patrick Harker, dismissed speculations of a 2023 Fed rate cut. Nonetheless, the official stated, "The Fed is unlikely to decrease interest rates this year, but could do so in 2024 if inflation begins to decline."

 

Notably, it appears that the recent decrease in US inflation expectations from a multi-day high has weighed on US Treasury bond yields and the US Dollar. The Federal Reserve Bank of St. Louis (FRED) 10-year and 5-year breakeven inflation rates decrease from monthly highs to 2.31 percent and 2.44 percent, respectively.

 

As Wall Street closes in the green, S&P 500 Futures follow the sentiment with slight gains, which weigh on the US Dollar. As a result, 10-year US Treasury note yields decline by around two basis points to 3.69 percent at the latest.

 

Since recent Federal Reserve (Fed) pronouncements indicating potential rate hikes appear muted, USD/CAD traders should keep a close eye on the US CPI data in the near future. In addition, discussions regarding the Fed's policy shift are approaching, so any negative US inflation data will not hesitate to send the Loonie pair down. Likewise, monitoring the price of oil is vital.

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