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Israeli Prime Minister Benjamin Netanyahu: (Regarding the situation in Iran) We have achieved tremendous progress. But it is not over yet. New developments could occur at any time.Israeli Prime Minister Netanyahu: We are at war with Iran, which is spreading instability around the world, and we have no better friend than the United States.On April 19, US President Donald Trump said in an interview with the New York Post that he would "very likely" travel to Islamabad, the capital of Pakistan, if the US and Iran could reach an agreement. When asked by a reporter whether he would go to Islamabad, Trump initially said, "I think it might be a little later. Well have to see how things go tomorrow." When pressed further, Trump stated that he would not make a decision before negotiations made progress, but "it will likely be later."April 19th - According to CNN, U.S. Energy Secretary Frank Wright stated in an interview on Sunday that Americans may have to wait until next year to escape gasoline prices exceeding $3 per gallon. Wright said that while the ongoing war with Iran has caused gasoline prices to soar, he is unsure when prices will fall below $3 again. "It could be later this year, or it could be next year," Wright said. "But prices have likely peaked and will start to decline, especially if the conflict is resolved." He also stated that ending the 47-year conflict and preventing Iran from acquiring nuclear weapons will certainly bring short-term disruption. However, he believes the U.S. has handled the situation exceptionally well. The U.S. is currently experiencing the largest energy flow disruption in history, and gasoline prices peaked a week ago, about $1 lower than the peak during the Biden administration.On April 19th, local time, the head of the security department in Gombad Kavus, Iran, stated that a fire broke out at a factory in the city around 2 PM local time. It is understood that the black smoke billowing from the scene was caused by the burning of materials inside the factory. The factory is located far from the city center and oil and gas facilities, and relevant departments have preliminarily determined that the fire does not pose a direct threat to the surrounding area. The report stated that the cause of the fire is still under investigation, and there are no reports of casualties.

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

 USD:CAD.png

 

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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