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August 23 - According to reports from the UK on the 23rd local time, Transtrike stated that due to a power outage at its control center in Birmingham, the company suspended operations starting on the morning of the 23rd. Trains on "almost all" lines were canceled or delayed, and the resumption time will be announced later.The U.S. National Hurricane Center reports that Tropical Storm Iselle has formed in the waters off Mexico.August 23 - According to the Nanning Municipal Emergency Management Committee, at 8:00 PM on August 23, the water level at the Nanning Hydrological Station on the Yongjiang River reached 71.41 meters. It is predicted that the Nanning urban section of the Yujiang River will experience flooding exceeding the warning level (73.0 meters) on the morning of August 24. In accordance with the provisions of the "Nanning Yujiang Flood Control Emergency Plan," and with the approval of the leadership of the Nanning Municipal Emergency Management Committee, it was decided to upgrade the Nanning Yujiang Flood Control Emergency Response from Level IV to Level III at 8:00 PM on August 23. All counties (cities, districts), development zones, and relevant member units are requested to carry out flood prevention work according to the relevant provisions of the plan and their respective responsibilities to ensure the safety of peoples lives and property.August 23 (Tasnim News Agency) – Iranian Islamic Revolutionary Guard Corps spokesman Mohbi stated that Iran has developed countermeasures against various hostile actions by the United States, including measures to address economic pressure. Speaking at a press conference in Karaj, a city in northern Iran, Mohbi said that the USs recent announcement of launching its "most severe economic war" against Iran actually indicates that the US has failed to achieve its military objectives. He added that the US has imposed economic sanctions on Iran for 47 years, and the current statements regarding "economic war" are intended to exert psychological influence on the Iranian people.August 23 – According to the official WeChat account of the Chinese Embassy in Saudi Arabia, several Chinese citizens have recently been detained by Saudi authorities for failing to declare large sums of cash they were carrying upon entry and exit from Saudi Arabia, as required by the newly revised Anti-Money Laundering Law Enforcement Regulations. Furthermore, cases of telecommunications fraud, currency exchange scams, and robberies targeting Chinese citizens are frequent. The Chinese Embassy in Saudi Arabia solemnly reminds Chinese citizens in Saudi Arabia to abide by local laws and regulations and to be vigilant against all types of fraud.

USD/CAD declines to 1.3500 on firmer Oil prices, BoC concerns over US inflation, and Fed Minutes

Daniel Rogers

Apr 10, 2023 14:35

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The USD/CAD maintains losses close to 1.3500, shattering a four-day winning trend, as traders brace for key Easter Monday data/events on major bourses. However, the recent decline in the Loonie-U.S. dollar exchange rate may be due to the increase in the price of WTI petroleum oil, Canada's primary export. In contrast to the recent increase in ardent Fed forecasts, the Bank of Canada's (BoC) dovish bias poses a challenge to pair sellers.

 

After increasing for three consecutive weeks, WTI crude oil prices gain 0.61 percent intraday near $80.00. Recent increases in the price of black gold may be due to geopolitical concerns surrounding China and Taiwan. In addition to the supply cut by OPEC+ and the faltering US dollar, the energy benchmark is sustained by the supply cut by OPEC+ and the weakening US dollar.

 

However, the US Dollar Index (DXY) has fallen for three consecutive weeks and is under pressure near 102,000.

 

Fears of higher Fed rates versus inaction from the Bank of Canada (BoC) grew after the upbeat US Jobs report versus the lack of significant positives in the March Canadian jobs report.

 

As a result, the CME's FedWatch Tool indicates a 69% chance of a 0.25 basis point rate hike in May, up from 55% prior to the US employment report.

 

Canada's headline Net Change in Employment increased to 34.7K in March from 21.8K in February, compared to the market consensus of 12K, while the Unemployment Rate came in at 5% versus the analysts' estimate of 5.0%. During the specified month, the Participation Rate decreased to 65.6% from the expected and previous rate of 65.7%. In addition, the average hourly wage fell 5.2% year-over-year in March, down from 5.5% in February.

 

In contrast, the US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) increased by 236K in March, the lowest increase since January 2021 (considering revisions), compared to the expected 240K and the previous 330,000. Additionally, the unemployment rate fell from 3.6% to 3.5%, while the labor force participation rate rose from 62.6% to 62.6%. The annual wage inflation rate decreased from 4.6% to 4.2%, below market expectations of 4.3%.

 

Futures on US equities ended higher, but yields remain under pressure ahead of the crucial BoC monetary policy meeting, US inflation, and Fed Minutes. Given the dovish concerns from the Bank of Canada (BoC) and the likely hawkish comments in the FOMC Minutes, the USD/CAD may see additional gains, barring any unexpected developments.


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