Forex News for 10 March, 2023

  • The Bank of Canada has decided to keep interest rates at 4.5% even though it anticipates that inflation will drop to as low as 3% in the next months, which will weaken the Canadian dollar.
  • While being less hawkish than the day before, Fed Chair Jerome Powell appeared before the US House of Representatives, and despite this, the US dollar and rates remained strong, with the US 2-Year Treasury Yield reaching a 15-year high of 5.085%.
  • For the first time since 1981, the US Yield Curve has inverted by more than 1%, raising the likelihood of an oncoming recession, but the robust JOLTS job statistics and the ADP non-farm employment change estimate point to a still-vibrant US economy.
  • The Canadian dollar is the weakest currency on the Forex market, while the Japanese yen is the strongest, which puts the CAD/JPY currency cross in the spotlight.
  • US Treasury Yields have increased as a result of the Fed’s hawkish remarks, with the 2-Year now trading at a fresh 15-year high and likely to soar even higher, providing an opportunity for trend traders.
  • Several commodities, like sugar and cocoa, are doing well, and some of them have continued to advance following significant bullish breakthroughs.
  • While prices for energy, durable goods, and services decreased, inflation in Canada continued to reduce for the third straight month, falling to 5.9% in January from 6.3% in December. 
  • The Bank of Canada is optimistic about economic growth and it is predicted that it  will relieve the pressures on the country’s products and labour markets. This will enable Canadian inflation to decline to around 3% in the middle of the year, which is required to meet the government’s 2% target.

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