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US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
2025 Market Outlook: Key January Events to Watch 
Bank of Korea Expected to Hold Interest Rates as Weak Won Limits Policy Easing 
China Holds Loan Prime Rates Steady in January as Market Expectations Align 
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Bank of Japan Likely to Delay Rate Hike Until July as Economists Eye 1% by September 
Bank of America Posts Strong Q4 2024 Results, Shares Rise 
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Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
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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
