The Morning Update

The USD is weaker as we start the day, equity markets are flat, oil prices are up with treasury yield lower. US PPI was released yesterday where the monthly reading was higher than expected. Fed Powell signals strong US economic outlook which may delay rate cuts. While the data and Powell’s comment should have been bullish for the USD, the market seem to have but morei mportance on Powell’s other comment that interest rates might have to be kept higher for longer but that cuts will eventually come, and inflation will get back to target. CPI to be released this morning.

In other news.  Biden told congress he wants to send more than US$ 1B in new weapons to Israel despite being opposed to a full-scale invasion of Rafah. Jordan has foiled a suspected Iranian-led plot to smuggle weapons in the country. Russia's aerial bombardment of Kyiv prompted Zelensky to ask for two more air defense batteries during U.S. Secretary of State Blinken's visit. Biden signs law banning imports of Russian uranium.

In currency news.  The AUD remains steady this morning with a positive sentiment despite the lower-than-expected Wage Price Index. The MXN is steady after weakening 2 days in a row. Commentary from the Governor of the Banxico and robust economic data for its key peers weigh on the MXN. Ahead of the CPI release the USD is losing ground JPY (0.37%), CNY (0.14%), AUD (0.30%), NZD(0.40%) and ZAR (0.25%).  

In commodity markets. Oil prices rises on expectations of higher demand and a weakened USD. Report also showed U.S. crude and gasoline inventories fell. After appreciating 1% yesterday, Gold continues its move higher this morning by adding another 0.45%, silver and copper are following the same trend with silver prices up 0.54% and Copper up1.7%. Soybean prices stabilized after Brazil raised its harvest forecast. Wheat trades 0.8% higher this morning.

Current level USD Index               104.849           Down 0.16%

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The USD/CAD edges lower this morning due to a weaker USD amid improved risk appetite. Market to remain quiet until the release of US CPI later this morning.

Current level USD/CAD               1.3630            Down 0.13%

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The EUR/CAD story remains the same – its trading in a tight range near 2024 highs – perhaps this morning CPI can help change the story.

Current level EUR/CAD                1.4758           Down 0.03%

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EUR/USD is benefiting from the USD overall weakness this morning. Eurozone GDP and US CPI to be released this morning could give a clearer picture of what both the ECB and Fed’s next move will be.

Current level EUR/USD                1.0825           Up 0.06%

GBP/EUR gathered some strength againstthe EUR this morning ahead of key economic data.

Current level GBP/EUR     1.1649(0.8580)        Up 0.03%

GBP/USD clings to recent gains against the soft USD. Steady wage growth deepens fears of a persistent inflationary pressure.

Current level GBP/USD                1.2613           Up 0.18%

Other ccy levels vs C$. GBPCAD 1.7192  AUDCAD.9063  CADCHF.6643 CADJPY 114.49  CADTHB 26.79  CADCNY 5.2975 CADNOK 7.8939 CADSEK 7.9095 CADDKK 5.0556  CADZAR 13.4968

Other ccy levels vs USD. JPY 155.83  CHF.9054 AUD.6637 NZD .6057  CNY 7.2226  MXN 16.8486  INR 83.4909 PLN 3.9407 CZK 22.852 ZAR 18.4039  ILS 3.6729  AED 3.6729 KWD 0.30718

Other Major X levels. EURCHF.9804  EURJPY 168.67 EURSEK 11.6775 EURNOK 11.6513 GBPCHF 1.1421  EURAUD 1.6308 GBPAUD 1.8999 AUDCHF.6011  AUDJPY 103.37  CHFJPY 171.89

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