Moldova Criticizes Russia Amid Transdniestria Energy Crisis 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Fed May Resume Rate Hikes: BofA Analysts Outline Key Scenarios 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
Indonesia Aims to Strengthen Rupiah as Central Bank Targets 16,400–16,500 Level 
BOJ Seen Moving Toward December Rate Hike as Yen Slides 
BOJ Faces Pressure for Clarity, but Neutral Rate Estimates Likely to Stay Vague 
Fed Officials Split as Powell Weighs December Interest Rate Cut 
Kazakhstan Central Bank Holds Interest Rate at 18% as Inflation Pressures Persist 
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
Brazil Central Bank Plans $2 Billion Dollar Auctions to Support FX Liquidity 
Japan’s Inflation Edges Higher in October as BOJ Faces Growing Pressure to Hike Rates 
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
