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Usdcadforecast

Dollar Hits 6.5-Month High as Central Banks Adjust RatesOn September 21, 2023, the U.S. dollar reached its highest level in 6.5 months after the Federal Reserve indicated that it will continue its restrictive monetary policy. The Swiss franc weakened as the Swiss National Bank decided to keep rates unchanged for the first time since March 2022. The Federal Reserve held interest rates steady within the expected range of 5.25%-5.50%. However, they emphasized their commitment to a hawkish policy that aims to control inflation without harming the economy or causing job losses. The Fed's updated projections suggest that interest rates will be tighter than previously thought until 2024. In Europe, Sweden's Riksbank and Norway's central bank raised rates as expected. The pound fell to its lowest level since April ahead of the Bank of England's policy announcement. The Japanese yen reached its lowest level since November before the Bank of Japan's policy announcement on Friday. However, market analysts doubted that there would be any significant policy changes in the meeting. Both the Australian and New Zealand dollars weakened after the Fed's meeting. However, the New Zealand dollar received some support after better-than-expected economic growth data for Q2 2023. European equities faced challenges as the Fed hinted at the possibility of another rate hike, following a rapid increase in rates over the past 18 months. This was further impacted by the Swiss National Bank's decision to keep rates unchanged and Norway's central bank signaling a potential rate hike in December.
by HiumanPre
12
USDCAD Reacts to CPI & Debt Ceiling WoesUSDCAD Reacts to CPI & Debt Ceiling Woes Two big events affecting the USD/CAD pair include the CPI reading from Canada this week as well as the ongoing debt ceiling crisis in the US. In April, the monthly Canadian headline CPI surged by 0.7%, resulting in an annual rate of 4.4% compared to the previous 4.3%. This increase exceeded the consensus estimates by three-tenths of a percent in both instances. Consequently, the USD/CAD experienced a 0.4% decrease, reaching 1.3404, before rebounding to a high of 1.3535 USD/CAD has now also breached its 200-day simple moving average on the downside, closing below it to reinforce the bearish signal. Strengthening this assertion is that the Bank of Canada had recently put a halt to its tightening campaign, having raised interest rates by 425 basis points since March 2022. However, they indicated that this pause was dependent on the inflation outlook aligning with the forecasted trajectory. It is unlikely that this week's CPI data meets this requirement. Offsetting the positive news for the Canadian dollar is the prevailing optimism in the United States regarding the government's ability to avoid defaulting on its debt. Following emergency discussions at the White House, President Joe Biden and Republican leaders cautiously expressed hope for a potential agreement to raise the US debt ceiling. The agreement must be reached and approved by both houses of Congress before the federal government exhausts its funds to cover expenses, which could occur as soon as June 1 (only two weeks away). Despite House of Representatives Speaker Kevin McCarthy stating that the two parties remain considerably apart, he believes that a deal could be achieved by the end of the current week.
by BlackBull_Markets