USDCAD is moving in the Descending channel and the market has reached the lower high area of the channel
USDCAD – Gains Above 1.3650 Before Canadian GDP Data
The Canadian GDP for the month of February is scheduled this week, BoC is expected to cut the rates in the June or July month is expected. Policy divergence from BoC and FED makes Canadian Dollar pretty weaker against USD in the market.
The USD/CAD pair is recording modest gains, hovering around 1.3665 during the early Asian trading session on Tuesday. The pair is receiving some support from a slight rebound in the US Dollar (USD), while the Loonie is facing pressure due to the decline in oil prices, which is a key driver for the commodity-linked currency. Market participants are keenly awaiting the release of Canada’s February Gross Domestic Product (GDP) growth figures. Additionally, attention is turning towards the upcoming Federal Open Market Committee (FOMC) interest rate decision scheduled for Wednesday.
Recent comments from US Federal Reserve (Fed) policymakers indicate a reluctance to lower interest rates. Fed Governor Michelle Bowman has mentioned “upside risks” to inflation, while Minneapolis Fed President Neel Kashkari has floated the idea of no rate cuts this year. Atlanta Fed President Raphael Bostic has even suggested a preference for hiking rates if inflation worsens. The Fed’s “higher-for-longer” rate narrative has bolstered the US Dollar (USD) and provided tailwinds for the USD/CAD pair.
The FOMC is widely anticipated to maintain rates within their current range of 5.25%–5.50% during Wednesday’s meeting. Investors will closely analyze the tone of the FOMC statement and subsequent press conference. A hawkish stance from the US central bank could further strengthen the USD, attracting more foreign capital inflows. Conversely, a dovish tone may exert selling pressure on the Greenback.
Regarding the Canadian Dollar (CAD), traders anticipate that the Bank of Canada (BoC) will delay any potential rate cuts until June or July. The upcoming GDP data for February could provide insights into the performance of the Canadian economy. Weaker-than-expected data might prompt the BoC to consider interest rate cuts sooner, thereby weighing on the CAD. Moreover, continued declines in oil prices could further dampen the Loonie, as Canada is the largest crude oil exporter to the United States (US).
XAUUSD – Gold Price Stays Near $2,320 Amid Stronger USD Ahead of US Data
The Gold prices are moving flat ahead of FOMC meeting is scheduled tomorrow, moreover rates are hold at 5.25%-5.50% is expected from the economists side.The Israel- hamas peace talks is under progress in the Cairo, Good outcome of talks will potential down the prices of Gold in the market against USD.
XAUUSD Gold price has broken the Ascending channel in downside
The gold price (XAU/USD) remains subdued as it heads into Tuesday’s European session, hovering near the lower end of its daily range just above the $2,320 level. Investors are increasingly convinced that the Federal Reserve (Fed) will delay interest rate cuts due to persistent inflation, a sentiment reinforced by Friday’s release of the US Personal Consumption Expenditures (PCE) Price Index. This expectation of a hawkish Fed stance has bolstered demand for the US Dollar (USD), prompting flows away from the non-yielding yellow metal.
However, a slightly softer tone in US equity futures could offer some support to gold, which is considered a safe-haven asset. Additionally, traders may refrain from making aggressive moves ahead of key central bank events and important US economic data releases scheduled for later in the week, including the highly anticipated Nonfarm Payrolls (NFP) report. This data will provide insights into the Fed’s future rate-cutting plans, potentially impacting gold prices.
In the interim, the release of the Chicago PMI and the Conference Board’s Consumer Confidence Index later in the day could provide short-term trading opportunities.
EURUSD – German Retail Sales Rise by 0.3% YoY in March, Rebounding from -2.7% Prior
The German Retail sales jumped 0.30% YoY in March month versus -2.7% printed in the previous month. 1.8% Jumped in MoM March versus -1.9% dropped in the February month. Euro pairs small recovery after the medium recover from sales area in the Euro zone last month.
EURUSD is moving in an Ascending channel and the market has reached the higher low area of the channel
According to data released by Destatis on Tuesday, Germany’s retail sales experienced a notable increase of 1.8% month-on-month (MoM) in March. This marked a significant rebound from the previous month, where retail sales had dropped by 1.9% in February.
On an annual basis, retail sales in Germany showed a positive trend, with a 0.3% increase recorded in March compared to a notable decline of 2.7% observed in February. This improvement in annual retail sales figures reflects a positive shift in consumer spending patterns within the Eurozone’s leading economy.
USDJPY – Japan’s Top FX Diplomat Urges Appropriate Actions on FX
The Japan Top currency Diplomat Masato Kanda said FX Intervention data will announced by Ministry of Finance at the end of the next month. Currently JPY weakness is affecting import prices to rise higher and people suffering borrowing materials at higher cost. So proper intervention in FX market will take soon as per FX Moves.
USDJPY is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
Masato Kanda, Japan’s top currency diplomat, stated that he would instruct the Bank of Japan (BoJ) to intervene in the foreign exchange (FX) market when he deems it necessary. However, when questioned by the media about whether authorities had intervened in the markets to support the Yen, Kanda refrained from providing any comment on FX intervention at this time. He further mentioned that the Ministry of Finance would release specific figures regarding currency intervention at the end of May.
Kanda’s key remarks included:
– No comment on intervention.
– Will disclose at the end of next month.
– Currency impact has a bigger effect on import prices now.
– Excessive FX moves could affect daily lives.
– Need to take appropriate actions on FX.
– Inappropriate to comment on Bank of Japan Governor Ueda’s remarks.
– Ready to take action 24 hours a day.
– Won’t comment on FX levels.
USD INDEX – USD Dips, Attention Shifts to Fed’s Decision
The US Dollar moved higher ahead of FOMC meeting scheduled on Tomorrow, Sticky inflation and Strong domestic data outcome last week makes FED to keep play with higher rates in the market in this year 2024. Many FED members believed that inflation is not chances to move towards the target of 2% this year, So FED has to keep higher rates in this year is possible from rates lowering.
USD INDEX is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
The US Dollar Index (DXY) is experiencing a decline on Monday, dropping to 105.70. This decrease can be attributed to recent intervention by the Bank of Japan (BoJ), which has caused a slight depreciation in the value of the USD. However, market analysts anticipate that the Greenback’s rally will persist, supported by the divergence in monetary policies favoring the US Dollar and expectations of a hawkish stance from the upcoming Federal Reserve (Fed) meeting.
The US economy continues to demonstrate resilience, and persistent inflationary pressures may sustain the USD’s upward momentum. The Fed has maintained a hawkish stance, resisting calls for easing measures, and the likelihood of a rate cut in June appears low. Market participants will closely monitor the messaging from the Fed meeting scheduled for Wednesday for further guidance.
In the daily digest of market movers:
– The Fed is expected to maintain a hawkish approach, emphasizing robust growth and sustained inflation in the US economy.
– Unchanged interest rates, coupled with strong US economic data, may support the upward trajectory of US Treasury bond yields.
– Market expectations for future Fed meetings indicate a 10% likelihood of a rate cut in June, 35% in July, and less than 80% in September.
– US Treasury bond yields have declined, signaling an unfavorable environment for the US Dollar. Specifically, the 2-year yield stands at 4.97%, the 5-year yield at 4.65%, and the 10-year yield at 4.63%.
USDCHF – Near 0.9100 Amid Improved Risk Sentiment
The USDCHF is moving higher ahead of FOMC meeting is scheduled tomorrow and Swiss Franc is depreciating after the peace talks going between Israel and Hamas in the Cairo. SNB have the chances to rate cuts in the next meeting if inflation is sustained in the same lower state.
USDCHF is moving in the Box pattern and the market has reached the resistance area of the pattern
USD/CHF is retracing its recent gains observed on Friday, trading around 0.9120 during the European session on Monday. The downtrend in the US Dollar (USD) suggests a potential shift towards a risk-on sentiment, thereby exerting downward pressure on the USD/CHF pair.
Market analysts anticipate that the US Federal Reserve (Fed) will maintain its current interest rate range of 5.25%–5.5% in the upcoming policy meeting scheduled for Wednesday. This stance is likely due to concerns about robust inflation. The annual US Core Personal Consumption Expenditures (PCE) Price Index data for March, released last Friday, showed an increase, indicating that the Fed might postpone any potential rate cuts until September. According to the CME FedWatch Tool, the probability of the Fed keeping interest rates unchanged in the June meeting has risen to 87.7%, compared to 81.7% from the previous week.
On the Swiss side, during the Swiss National Bank (SNB)’s General Meeting of Shareholders on Friday, Chairman Thomas J. Jordan reiterated the bank’s commitment to closely monitor inflation. He emphasized the SNB’s readiness to lower interest rates further if necessary. In March, the SNB surprised markets by reducing its main policy rate by 0.25 percentage points to 1.5%.
Chairman Jordan underscored the SNB’s success in containing inflation but cautioned about prevailing high uncertainty and the potential for unforeseen shocks. He stressed the importance of maintaining focus on price stability and cautioned against calls to broaden the SNB’s mandate, labeling such demands as perilous.
Investors are eagerly awaiting the Consumer Price Index (CPI) data scheduled to be released by the Swiss Federal Statistical Office on Thursday. The CPI serves as a crucial indicator for assessing inflation and changes in purchasing patterns in Switzerland.
GBPUSD – Holds Gains Above 1.2550, Awaits Fed Rate Decision
The GBP is moving higher after the rate cut bets on BoE is diminishing day by day due to BoE members have less confidence on inflation to come target as 2% in 1st half of 2024. Ahead of FOMC meeting tomorrow, GBP is moved flat against USD.
GBPUSD is moving in the Descending channel and the market has fallen from the lower high area of the channel
Market attention is primarily focused on the upcoming Federal Open Market Committee (FOMC) interest rate decision scheduled for Wednesday, followed by the release of April’s Nonfarm Payrolls (NFP) report on Friday.
The consensus among investors is that the US Federal Reserve (Fed) will maintain interest rates at their current level, which is at a more than two-decade high. The tone of the FOMC meeting and Chair Jerome Powell’s subsequent press conference will provide further insights into the Fed’s policy stance. Market expectations for 2024 include only one potential rate cut by the Fed, a significant shift from earlier projections of around six quarter-point cuts at the beginning of the year.
Recent data on US GDP growth and inflation, which exceeded expectations, may encourage the Fed to adopt a more hawkish stance and keep interest rates higher for an extended period to ensure that inflation moves toward the central bank’s 2% target. Such a stance could strengthen the US Dollar and limit the upside potential of the GBP/USD pair in the short term.
Conversely, the British Pound (GBP) is gaining momentum amid mixed signals from Bank of England (BoE) policymakers regarding the inflation outlook. Reduced speculation about potential rate cuts by the BoE is providing support to the Cable. In the absence of significant economic data releases from the UK, the dynamics of the USD will continue to play a crucial role in influencing the direction of the GBP/USD pair.
AUDUSD – Australia’s March Retail Sales Fall 0.4% MoM vs. Expected 0.2%
The Australian Retail sales data dropped -0.40% in the March month versus 0.30% increase in the previous month and 0.20% is expected rise. The Australian Dollar dropped against USD after the data published.
AUDUSD is moving in the Descending channel and the market has reached the lower high area of the channel
According to official data released by the Australian Bureau of Statistics (ABS) on Tuesday, Australia’s Retail Sales, which serve as a gauge of consumer spending in the country, experienced a decline of 0.4% month-on-month (MoM) in March. This marks a reversal from the previous reading, which showed a 0.3% increase. The reported figure fell short of market projections, which anticipated a rise of 0.2%.
NZDUSD – Nears 0.5950 Before Wednesday’s Fed Decision
The NZDUSD pair moved down against counter pairs after the ANZ Business confidence data came at 14.9 in the April month against 22.9 in the March month, this is the third decline in the consecutive months. These business readings are decline due to RBNZ keeping higher rates in the economy, to counter consumer spending lower and business profits to lower and keep the inflation at the target of 2%.
NZDUSD is moving in the Descending channel and the market has fallen from the lower high area of the channel
The NZD/USD pair is retracing its recent gains and is trading around 0.5950 during the Asian session on Tuesday. This decline can be attributed to a rebound in the US Dollar (USD), which has undermined the NZD/USD pair. The USD’s strength follows hawkish remarks from US Federal Reserve (Fed) officials, indicating no immediate need for rate cuts.
Fed Chair Jerome Powell mentioned on Monday that it would likely take “longer than expected” to be confident that inflation is moving towards the central bank’s 2% target. Powell also stated that the central bank can maintain high rates “as long as needed.” Additionally, Fed Governor Michelle Bowman expressed concerns about “upside risks” to inflation, while Minneapolis Fed President Neel Kashkari suggested the possibility of no rate cuts occurring this year.
The US Dollar Index (DXY), which measures the USD’s performance against six major currencies, has edged higher to near 105.80. Traders are anticipated to closely observe Wednesday’s release of the ADP Employment Change and ISM Manufacturing PMI from the United States (US), along with the Fed Interest Rate Decision, as these events are likely to influence market sentiment and USD movement.
Meanwhile, in New Zealand, the ANZ Business Confidence fell to 14.9 in April from March’s reading of 22.9, marking the third consecutive month of decline and hitting the lowest level since last September. This indicates a notable weakening of the economy, likely influenced by the Reserve Bank of New Zealand’s (RBNZ) decision to raise interest rates.
Moreover, amidst decreasing concerns about a potential conflict between Israel and Iran, growing optimism regarding peace talks between Israel and Hamas in Cairo is boosting investors’ appetite for riskier currencies such as the New Zealand Dollar (NZD). This sentiment could limit the losses of the NZD/USD pair.
CRUDEOIL – WTI Below $82.50 Amid Israel-Hamas Talks, Fed Rate Cut Expectations
The Crude Oil prices are moving lower after the peace talks for the humanitarian assaults in Gaza is taken place at Cairo between Israel and Hamas last day. The US FED is required to keep the rates at 5.25% to 5.50% in this week is expected. Oil demand is slumped by the world markets due to excessive inventories and War peace talks hopes in the market.
XTIUSD Oil price is moving in an Ascending channel and the market has reached the higher low area of the channel
On Tuesday, Western Texas Intermediate (WTI), the benchmark for US crude oil, is trading around $82.20. The decline in oil prices comes as ceasefire talks between Israel and Hamas in Cairo ease concerns about a broader conflict in the Middle East.
The latest ceasefire proposal involves significant compromises from Israel, which faces international pressure over the fate of captives and criticism for the humanitarian crisis in Gaza caused by the conflict, as reported by the Guardian. Successful ceasefire negotiations could reduce the geopolitical risk premium embedded in oil prices.
Furthermore, recent US inflation data and a hawkish stance from the US Federal Reserve (Fed) have dampened expectations of imminent interest rate cuts. The Fed is expected to maintain rates in the current 5.25%–5.50% range at its meeting on Wednesday. Market participants will closely monitor Fed Chair Jerome Powell’s press conference for insights into the central bank’s stance on interest rates. The expectation of “higher-for-longer” interest rates could strengthen the US Dollar (USD) and exert downward pressure on USD-denominated oil.
Later today, markets will focus on Chinese Caixin Manufacturing PMI, NBS PMI data, Eurozone inflation data, and GDP growth figures. Additionally, the API Weekly Crude Oil Stock for the week ending April 26 will be released.
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