USD/CAD: Bank of Canada forecasts inflation to rise for several months
The USD/CAD pair rose to 1.3220 last week after the Bank of Canada unexpectedly decided to raise interest rates by 100 percentage points at once, bringing them to 2.50%.
A sharp tightening of monetary policy raised fears of a recession in the Canadian economy and put pressure on the national currency. At the moment the price is trading around 1.2962 amid the upward correction in oil prices, but in general the positions of the trading instrument do not look stable.
The head of Bank of Canada Tiff Macklem, said that despite the actions of the financial authorities, the inflation rate in the country is only increasing. Macroeconomic statistics will be presented on Wednesday, and experts are predicting an increase to 8.3%.
McLeom also said that high price growth will continue for at least a few months, then begin to slow. but will not return to the target level of 2.0% until 2024 only if the situation is not interfered by the spiral “wages – prices”, when companies raise wages to keep their employees and then pass higher costs to consumers. Such a situation can already be seen in the Canadian economy.
Against this background, the U.S. dollar looks more attractive to investors. Although the national economy is also on the verge of a recession due to a sharp rise in interest rates, a strong labor market gives investors hope that it will be shallow and short-lived.
Support and Resistance Levels
The USD/CAD pair continues to trade in an uptrend, but is now correcting downward. The price is close to 1.2939 (Murray [2/8]), which is supported by the middle line of the Bollinger bands. If the price goes lower, the pair will continue moving towards 1.2817 (Murray [1/8]) and 1.2695 (Murray [0/8]). In case the price breaks through the level of 1.3061 (Murray [3/8]), the upside growth will resume up to the upper line of the uptrend channel around 1.3305 (Murray [5/8]).
Technical indicators do not give a single signal: Bollinger Bands are directed upward and the MACD histogram is stable in the positive zone, which confirms the preservation of the uptrend. but Stochastic has rushed down.
Wall Street futures rise after the U.S. Fed meeting
U.S. stock index futures are rising Thursday, trading data showed. Markets are assessing the outcome of the U.S. Federal Reserve (Fed) meeting.
The Dow Jones Industrial Average (DJIA) futures rose 0.22% to 32,329 points, the NASDAQ high-tech index rose 0.96% to 12,828.5 points and the S&P 500 broad market index rose 0.48% to 3,989.75 points.
The Fed on Wednesday expectedly raised its benchmark rate by 25 basis points to 4.75-5% per year. The regulator noted that it does not expect the rate reduction this year, but allows it next year. U.S. exchanges were down 1.6% in Wednesday trading.
According to the CME Group, 55.8% of analysts now expect the Fed’s discount rate to remain unchanged in May, while 44.2% expect it to rise another 25 basis points. Thus, markets concede that the Fed may interrupt the cycle of hikes that began last March.
At the same time, shares of cryptocurrency exchange Coinbase were down 10.6% in pre-bid trading. The exchange this week received notice from U.S. authorities of an impending charge of violating laws.
Later in the trading, statistics on initial jobless claims in the U.S. for the week through March 18 will be released. Analysts forecast that the figure would increase by 5 thousand to 197 thousand applications.
Earlier we reported that the US budget deficit was $262bn in February.
ITB (International Trading Brachium) Broker Announced Its YouTube channel
(Mahe, Seychelles-March 08, 2023) – ITB BROKER, LLC, an international forex broker, has announced that with our community growing, we believe that this will be the most effective medium to communicate with and so, we’re proud to announce the launch of ITB YouTube channel .
When a picture speaks a thousand words, How about a video?
- Throughout our community building initiative, we strongly believe in video as our means of communication. Video has played a pivotal role in describing our futuristic services to our audience and in communicating our disruptive vision to potential traders or investors.
- Over the next few weeks, we will be launching interesting videos on upcoming ITB features, bonuses, partnership or IB announcements and financial market expert interviews.
- YouTube is a great place to pick up forex trading tips and learn how to use them in the real world.
There are a number of YouTubers that make great educational videos, perfect for beginners or those considering taking up forex trading. ITB group with over 10 years of financial experience provides you with useful tips and hints of forex trading via its YouTube channel.
ITB Broker or ITBFX is a leading provider of online foreign exchange (FX) trading, CFD trading, and related services.
Founded in 2017, the company’s mission is to provide enthusiastic traders with access to the world’s largest and most liquid market by offering innovative trading tools, applying excellent trading platform, meeting strict financial standards, and striving for the best online trading experience in the market.
In addition, ITB offers educational courses on FX trading and Cryptocurrencies on academy section of ITBFX website.
U.S. budget deficit totaled $262 billion in February
According to a report from the U.S. Treasury Department, the U.S. budget deficit in February was $262,434 billion compared to a $38.8 billion deficit in January. The Dow 30 also had problems.
Analysts at DailyFX suggested that the nation’s budget deficit for February was expected to be $256 billion. A year earlier, in February, the U.S. posted a budget deficit of $216,590 billion.
According to the GAO report, U.S. government spending rose 3.5 percent year over year last month to $524.548 billion, while revenue, in contrast, declined 9.5 percent to $262,114 billion.
Earlier, the U.S. edition of the Washington Post published an editorial stating that the new draft budget proposed by the Biden administration undermines U.S. national security and its ability to invest in the future, because it suggests a further growth of the U.S. national debt.
The WP editorial board noted that the new draft budget assumes a $2 trillion budget deficit, including due to the high cost of providing health insurance to the elderly of the baby boomer generation.
Earlier we reported that the EU has agreed to reduce energy consumption by 11.7% by 2030.
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