Fed’s Williams Signals One More Rate Hike Before Year-End 
Fed’s Hammack Says Bond Yield Surge Is Not Driven by Inflation Fears 
BOJ Flags Import Costs and Yen Shocks as Persistent Inflation Risks 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
Moldova Criticizes Russia Amid Transdniestria Energy Crisis 
RBI Uses $10 Billion Currency Swaps to Drain Excess Rupee Liquidity 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
2025 Market Outlook: Key January Events to Watch 
Central Banks Could Buy 20,000 Tonnes of Gold: BofA 
Yen Sinks as BOJ Rate Hike Fails to Impress Markets 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
Global Markets React to Strong U.S. Jobs Data and Rising Yields 
U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
Add as a preferred source on Google
The USDCAD longs are adjusted, stopped higher on account of the range-break higher following the BoC’s abandonment of its hiking bias. The new stop could not withstand the torrid drop in US short-end rates that ensued in the wake of two poor US inflation prints leading into the FOMC, even despite Canada printing its fourth monthly contractionary GDP print in the last half year.
Yet with the FOMC pouring cold water on any market hope of an insurance cut, USDCAD has resumed its climb higher and back out of the range in which it was encapsulated since early March. And, with Canada's manufacturing PMI contracting for the first time in three years, we are still biased towards further topside on the pair as the 2Q recovery that the BoC anticipates is already off to a tepid start.
Elsewhere, positive (if misunderstood) headlines this week surrounding USMCA passage prospects appeared to cause a quick but notable knee-jerk move lower in the pair. This would affirm our belief that the market should be increasingly sensitive to news surrounding the fate of the trade pact (and should theoretically be more sensitive to negative news in particular, which we anticipate based on current political signals).
Thus, volatility surrounding USMCA looks set to feature more prominently in the coming weeks and which we feel is biased towards pushing USDCAD higher, leaving us well-positioned with our one-touch USDCAD call option.
Trade updates:
Booked USDCAD longs at 1.3364 at the beginning of March. Squared out at 1.3390 for a profit of 0.31%. Instead, added longs in a 3m USDCAD 1.40 one-touch. Paid 16.70% as part of a calendar spread. Marked at 16.72%. Courtesy: JPM
Currency Strength Index: FxWirePro's hourly CAD spot index is inching towards -22 levels (which is mildly bearish), USD is at 18 (mildly bullish), while articulating (at 13:21 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
