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The Eurozones seasonally adjusted trade balance for June, the final reading of seasonally adjusted employment for the second quarter, and the revised annual GDP growth rate will be released in ten minutes.On August 14th, the Hong Kong government announced on Friday that it has revised its 2026 GDP growth forecast upward to 3.5-4.5%, from the previous forecast of 2.5-3.5%. Hong Kong government economic advisor, Fan Wan-er, stated that Hong Kongs economy should see robust growth in the second half of this year. Strong global demand for AI-related electronic products is expected to continue supporting Hong Kongs merchandise trade performance, and related logistics services should also benefit from this positive momentum. The revised figures released today show that Hong Kongs second-quarter GDP grew by 4.3% year-on-year, but fell by 0.6% quarter-on-quarter, consistent with previous estimates.August 14th - In July, the amount of cross-border RMB settlement under current account items was 1.75 trillion yuan, of which goods trade, services trade and other current account items were 1.32 trillion yuan and 0.43 trillion yuan respectively; the amount of cross-border RMB settlement for direct investment was 0.63 trillion yuan, of which outward direct investment and foreign direct investment were 0.22 trillion yuan and 0.41 trillion yuan respectively.August 14th - At the end of July, the balance of domestic and foreign currency deposits reached 354.49 trillion yuan, a year-on-year increase of 8.1%. The balance of RMB deposits at the end of July was 346.47 trillion yuan, a year-on-year increase of 8.1%. In the first seven months, RMB deposits increased by 17.79 trillion yuan. Among them, household deposits increased by 6.95 trillion yuan, non-financial enterprise deposits increased by 1.57 trillion yuan, fiscal deposits increased by 1.95 trillion yuan, and deposits of non-bank financial institutions increased by 5.76 trillion yuan. At the end of July, the balance of foreign currency deposits reached 1.18 trillion US dollars, a year-on-year increase of 17.9%. In the first seven months, foreign currency deposits increased by 121.2 billion US dollars.Russian Ministry of Defense: The cities of Oletskoy and Novonikoyevka in Donetsk have been occupied.

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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