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Market news: Colombia has raised benchmark prices for gasoline and diesel.The Russian Foreign Ministry announced it will issue a travel warning, reminding Russian citizens of the risks of traveling to countries that have extradition treaties with the United States.On April 1st, it was reported that on March 31st, the Peoples Bank of China, the Ministry of Science and Technology, the State Financial Regulatory Commission, and the China Securities Regulatory Commission jointly convened a meeting to exchange and promote science and technology finance. The meeting emphasized that the "15th Five-Year Plan" period is a crucial period for building a strong science and technology nation, and science and technology finance should provide higher-quality services to support this goal. Relevant departments and institutions should work together to continuously improve the science and technology finance working mechanism and solidly advance all key tasks for the year. They should continue to strengthen coordination and interaction among relevant departments, local governments, and financial institutions, expand information sharing, accelerate the construction of a technology factor market, and improve the efficiency of financial resource allocation. They should enhance the professional capabilities of science and technology finance services and enrich financial products adapted to the characteristics of high-tech fields. They should leverage the role of policies such as relending for technological innovation and technological upgrading, the pilot program for equity investment by financial asset investment companies, M&A loans, and the "technology board" in the bond market to promote more precise allocation of financial resources to the field of technological innovation.The European-Mediterranean Seismological Centre reports a 6.2-magnitude earthquake in northern Peru.U.S. mortgage rates rose for the fourth straight week, reaching their highest level since August of last year, dampening refinancing and homebuying activity. Data released Wednesday by the Mortgage Bankers Association showed that the 30-year mortgage contract rate rose 14 basis points to 6.57% in the week ending March 27. Over the past four weeks, the rate has risen by nearly 0.5 percentage points, the largest increase since 2024. The associations mortgage application index fell for the second straight week, while the refinancing index declined further by 17.3%. Mortgage rates, which are linked to U.S. Treasury yields, have surged following concerns about rising inflation triggered by the Iran war. Lower borrowing costs at the beginning of the year had provided support for the weak housing market, but this benefit has largely faded.

Near 1.3600, USD/CAD Meets Difficult Resistance Amid a Weak USD Index and Rising Crude Prices

Daniel Rogers

Mar 29, 2023 14:32

USD:CAD.png 

 

Near 1.3600, the USD/CAD pair encountered resistance during the Asian session. As the US Dollar Index (DXY) appears vulnerable to further losses below 102.40, the Canadian dollar appears to have a sturdy downside bias. The USD Index has found support near 102.40, but a retracement is likely as risk appetite improves.

 

The USD Index is under intense pressure as a result of the decline in U.S. banking concerns. As reported by Reuters, US House Speaker Kevin McCarthy stated in an interview with CNBC on Tuesday that "at this time" there is no need for universal insurance on all bank deposits, reviving concerns of a banking crisis in the United States.

 

Tuesday's S&P500 futures remained predominantly constrained in response to House Speaker Kevin McCarthy's remarks. The Federal Reserve (Fed) is expected to maintain a consistent tone when announcing its interest rate decision at its May monetary policy meeting, despite the optimistic market sentiment.

 

In the interim, demand for U.S. government bonds remained low due to investors' expectation that the nation will emerge from its banking crisis sooner. This led to a rise in 10-year US Treasury yields to 3.57 percent.

 

According to Bloomberg, the Canadian Dollar remained volatile on Tuesday after Finance Minister Chrystia Freeland's announcement that dividends received by financial institutions from holding domestic equities will be considered business income. This will generate billions in tax revenue from banks and insurance firms that receive dividends from Canadian corporations.

 

Due to a weakening US Dollar and expectations of additional sanctions against Russia, the price of oil has risen to close to $74.00 on the energy front. The US Energy Information Administration (EIA) oil inventory data will be attentively monitored for additional guidance. As anticipated, the US EIA will report an increase of 0.187 million barrels in oil stocks for the week ending March 24.

 

Notably, Canada is the leading oil exporter to the United States, and rising crude prices would strengthen the Canadian Dollar further.

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