- USD/CAD is demonstrating a sideways auction, following the footprints of the USD Index.
- After the fiasco of SVB, Signature Bank, and Credit Suisse, a US-based First Republic Bank came under scrutiny.
- The demand for US government bonds dropped as investors are now considering an unchanged monetary policy by the Fed.
The USD/CAD pair is displaying a back-and-forth action around 1.3720 in the early Asian session. The Loonie asset has turned sideways after a downside move and is expected to continue further toward the round-level support of 1.3700. The downside bias for the major has built as investors are worried about global banking turmoil, which is stretching day after day.
After the fiasco of Silicon Valley Bank (SVB), Signature Bank, and Credit Suisse, a US-based First Republic Bank has come under scrutiny. As reported by Reuters, financial institutions including JP Morgan Chase & Co and Morgan Stanley, confirmed earlier reports they would deposit up to $30 billion into First Republic Bank's coffers to stabilize the lender.
Although the move would infuse fresh life into the foreign exchange bank, it won’t fade the fact that global banking turmoil is for real and central banks are going to face various problems in executing their monetary policies, which are operated through commercial banks.
S&P500 futures recovered early losses and settled Thursday’s session on a promising note. The demand for US government bonds dropped as investors are now considering an unchanged monetary policy by the Federal Reserve (Fed) as the banking crisis is deepening. Also, the declining trend of the United States Consumer Price Index (CPI) is also supportive. Therefore, the 10-year US Treasury yields have gained to 3.58%.
The US Dollar Index (DXY) remained sideways around 104.40 as the street is mixed about unchanged monetary policy or a 25 basis point (bps) interest rate hike by the Fed next week.
On the oil front, oil price has corrected marginally after a recovery move and an upside extension is expected as the G7 countries are restricting themselves from further sanctions on Russia after setting the price cap at $60/barrel. It is worth noting that Canada is a leading exporter of oil to the US and a recovery in the oil price would support the Canadian Dollar.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.