BoC's Beaudry: Pressures keeping inflation high should start “moving away” next summer

Joel Frank Independent Analyst

Bank of Canada Deputy Governor Paul Beaudry said on Tuesday that the pressures keeping inflation high should start "moving away" next summer, according to Reuters. Beaudry has been speaking in a virtual speech to a provincial regulator about the housing market. According to the deputy governor, the pandemic has intensified two of the main financial vulnerabilities faced by the Canadian economy; housing market imbalances and high levels of household debt.

Market Reaction

USD/CAD has not seen any noticeable reaction to the latest comments from BoC's Beaudry. The pair has been under pressure in recent trade amid an ongoing rise in crude oil prices and breifly dropped back under 1.2700, where it trades flat on the day.

Author

Joel Frank

Independent Analyst

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018, specialising in the coverage of how developments in the global economy impact financial asset

AUD/USD remains depressed 0.7000, awaits FOMC Minutes

AUD/USD struggles to capitalize on its recent recovery move and trades with a negative bias below 0.7000 in Wednesday's Asian session. Amid geopolitical uncertainty, the US Dollar attracts some dip-buyers after a fresh leg up in US bond yields, keeping the pair under pressure despite hawkish RBA expectations. All eyes now remain on the FOMC Minutes.

USD/JPY holds firm near 158.50 ahead of Fed Minutes

USD/JPY hangs close to a one-and-a-half-week high near 158.50 in the Asian session on Wednesday, with bulls now awaiting a move beyond the 200-day SMA hurdle before positioning for further gains ahead of the FOMC Minutes. Meanwhile, a fresh leg up in US bond yields revives US Dollar demand amid geopolitical uncertainties, boosting the pair amid dovish BoJ commentary.

Gold retraces gains and nears two-month lows at $4,104

Gold retraces Tuesday’s gains on Wednesday and resumes its broader bearish trend, with the US Dollar appreciating across the board, as investors brace for the release of the minutes of the latest Federal Reserve meeting. The XAU/USD pair trades below $4,120 after retreating from the $4,180 area on Tuesday, drifting closer to the two-month low at $4,104.

Dogecoin extended correction and weakening momentum raise downside risks

Dogecoin extends its losses, trading around $0.090 down more than 5% so far this week. Bearish pressure is strengthening, with short positions reaching a one-month high and traders in overheated conditions. Meanwhile, weakening momentum indicators are also hinting at further losses in DOGE. Derivatives data shows cautious signals among traders.

Indian Rupee hits fresh four-month low, RBI hikes Repo Rate to 5.5%

The Indian Rupee weakens significantly against the US Dollar after a muted response, following the Reserve Bank of India’s monetary policy meeting on Wednesday. The USD/INR pair jumps to near 96.72, the highest level seen in four months. In the policy meeting, the RBI decide to hike its Repo Rate by 25 basis points to 5.5%, the first hike since February 2023.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.