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1. According to the Financial Times, Abu Dhabi National Oil Company plans to build an oil product pipeline bypassing the Strait of Hormuz. 2. According to foreign media reports, a joint statement shows that Indonesian business groups are calling on the government to issue technical guidelines for its plans to centralize exports and retain export profits in state-owned banks. The Indonesian Employers Association, along with the Miners, Coal Miners, Nickel Smelters, and Palm Oil Producers Association, stated that they support the new regulations but hope the government will cooperate with the private sector in their implementation. 3. According to CCTV News, on the 2nd local time, Israeli sources reported that the fourth round of Israel-Lebanon talks was held in Washington, D.C. 4. According to Iranian media Fars News, an informed source revealed that although some Western media and officials have attempted to describe the information exchange process between Iran and the United States as normal, there is currently no information exchange between the two sides. Information exchanges between Iran and the United States aimed at reaching a preliminary memorandum of understanding have been interrupted for at least several days. 5. Federal Reserves Hamak stated that inflation may require policy assistance to reach 2%; if the inflation trend does not cool, the Fed may need to act "as soon as possible"; maintaining stable interest rates is reasonable at present, but if high inflation persists, a larger adjustment may be needed; there are no signs of rising inflation expectations. 6. According to the European Commission, as of May 31, the EUs palm oil imports for 2025/26 were 2.6 million tons, compared to 2.75 million tons in the same period last year. The EUs soybean imports for 2025/26 were 12.38 million tons, compared to 13.32 million tons last year. 7. Iranian media reported on the 2nd that the application system for ship passage permits in the Strait of Hormuz is now fully open, allowing ship owners and captains worldwide to submit applications at any time of day, 24 hours a day. 8. The World Meteorological Organization issued a bulletin on the 2nd stating that considering factors such as unusually warm tropical Pacific Ocean waters, the probability of an El Niño event occurring from June to August is 80%, and the risk of extreme weather in the coming months is rising accordingly. 9. According to Dan Struven, co-head of global commodities research at Goldman Sachs, if commercial crude oil inventories continue to decline at the recent rate with the Strait of Hormuz almost completely closed, U.S. diesel inventories could fall to a critical level by August, enough to sustain only 20 days of supply. 10. U.S. JOLTs job openings surged in April, rising to 7.62 million from 6.89 million in March, reaching the highest level in nearly two years, while layoffs decreased. These signs indicate that the labor market remains strong despite pressure from rising energy costs due to the war with Iran.Bank of England Governor Bailey: Not all AI-related stocks will be winners.US Secretary of State Rubio: Iran will not receive the lifting of sanctions simply because the Strait of Hormuz has been reopened.U.S. Secretary of State Marco Rubio: Any reduction or easing of sanctions on Iran will be contingent upon the fulfillment of relevant conditions.Bank of England Governor Bailey: It is necessary to maintain the labor supply to promote economic growth.

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.