BOJ Holds Interest Rates Steady Amid Middle East Uncertainty 
Global Central Banks Hold Rates Amid Iran War-Driven Energy Price Surge 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
Wall Street Analysts Weigh in on Latest NFP Data 
Lithium Market Poised for Recovery Amid Supply Cuts and Rising Demand 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
China's Refining Industry Faces Major Shakeup Amid Challenges 
China Holds Benchmark Loan Prime Rate Steady for Tenth Consecutive Month 
Fed May Resume Rate Hikes: BofA Analysts Outline Key Scenarios 
Bank of Japan Holds Rates Steady Amid Iran War Inflation Fears 
Fed Holds Rates Steady as Middle East Conflict Clouds Inflation Outlook 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
European Stocks Rally on Chinese Growth and Mining Merger Speculation 
Bank of Japan Governor Signals Gradual Progress Toward 2% Inflation Target 
Both the Aussie and the Lonnie came under stress with the resultant effects of increasing rate cut speculation as in both countries the economy is doing much worse than previously anticipated. The Australian GDP growth in Q4 was considerably lower than the consensus of the market, the central bank that makes a downward revision on the part of the Reserve Bank of Australia now inevitable.
While the Canadian central bank (Bank of Canada, BoC) already reacted to the weakened growth momentum yesterday by removing the prospect of further rate hikes from its monetary policy statement. Instead, it now leaves its options open. However, yesterday’s changes do not have to mean that all rate hikes are now totally off the agenda. It is, however, imagine that the BoC will now consider a much smaller extent of rate hikes to be necessary.
There is a difference between whether it merely postpones rate hikes as it considers continued low levels of interest rates necessary to support the economy or whether it expects interest rate levels to peak at lower levels in this rate cycle. The latter would be significantly more negative for the Canadian dollar.
The policy repricing and FX move across G10 and assess as to how much of the policy repricing has been appropriate, where it’s perhaps gone too far versus what still needs to catch up. The pair has been sliding from the December peaks of 0.9775 levels with the mounting bearish sentiments, currently trading at the 0.9452 levels. We could foresee some downside traction in the weeks to come.
Hence, at spot reference: 0.9452 levels, we advise staying short in mid-month futures contracts on hedging grounds with a view to arrest the southward targets of another 200 - 300 pips, but maintain a strict stop loss of 0.9637 levels. Courtesy: Commerzbank
Currency Strength Index: FxWirePro's hourly AUD spot index is flashing -54 (which is bearish), while hourly CAD spot index was at -111 levels (bearish) at 11:45 GMT.
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
