Forex Today: FOMC Minutes Show Fed Go Slow on Rate Cuts – 22 February 2024

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

Forex Today: Canadian Inflation Falls Faster

Canadian inflation data released yesterday showed that annualized inflation has fallen more quickly than expected, from 3.4% to 2.9%, when 3.3% was expected.

  1. Canadian CPI (inflation) data was released yesterday. It showed Canadian inflation has fallen much faster than expected, with the annualized rate falling from 3.4% to 2.9%. This will increase speculation as to when the Bank might begin cutting rates, so the Loonie weakened a little yesterday, but the Bank has made no public statements about rates, so it is all only speculation,
  2. Australian Wage Price Index data came in exactly as expected, increasing by 0.9% quarter by quarter.
  3. In the Forex market, the New Zealand Dollar has been the strongest major currency since the Tokyo open today. The Japanese Yen has been the weakest, as it falls further despite warnings from the Japanese Finance Minister Suzuki yesterday that he is watching the situation closely. The highest volatility recently has been seen in the USD/JPY currency pair, and in Yen crosses, although this is starting to decline.
  4. Bitcoin briefly made a new 20-month high above $52,884 yesterday before giving up all its gains of the day. Trend traders and investors will remain interested in Bitcoin on the long side.
  5. Global stock markets are mixed. Trend traders will still look to be involved on the long side of major US equity indices, despite last week’s losses, and day traders may consider trading these indices long if they show bullish momentum after the market opens.
  6. Cocoa futures regained more ground yesterday after Friday’s sharp fall, which lead to profit taking and the suggestion that the current leg of the long-term bullish trend may have ended. Trend traders will be watching closely and considering going long, especially if the price makes a full recovery and breaks to a new long-term high.
  7. The US Federal Reserve will release FOMC meeting minutes later today.

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Inflation in Canada Falls to 2.9% in January

Canada’s CPI drops to 2.9% in January, first time below 3% since March 2021. Core inflation still high, BoC rate cuts uncertain. CAD rises slightly, S&P/TSX dips.

Canada’s Consumer Price Index (CPI) dropped to 2.9% year-on-year in January, down from 3.4% in December 2023 and below the market expectation of 3.3%. This marked the first time that inflation stood below 3% since March 2021. The main drivers of the downswing were lower prices for fuel, food and clothing on an annual basis. Monthly, inflation was flat (0%) in January, compared to -0.3% in December and below the market estimate of 0.4%.

The average of two of the Bank of Canada’s (BOC) core measures of inflation came in at 3.35% in January, below the December gain of 3.6%. Core CPI excludes food and energy items and is considered a more reliable indicator of inflation trends than CPI.

The good news is that headline inflation is once again within the Bank of Canada’s target range of 1%-3%. Still, the BOC’s goal is to reduce inflation to the 2% midpoint of the target range. Additionally, core CPI remains above the 3% upper band of the target range, which means that it is too early to declare victory against inflation.

Canada’s inflation rate has been zigzagging, as the decline in January followed an increase in December. This means that inflation’s path is uncertain, although the January data is clearly good news for the BOC.

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When should the BOC start to lower rates? That is no simple question. The BOC hasn’t raised interest rates since June but unlike the United States Federal Reserve, is yet to signal that rate cuts are on the table. At last month’s rate meeting, the BOC did not give any hints that it was planning to lower rates.

There are two key factors that the BOC is monitoring to determine its rate path – 1) inflation and 2) economic activity.

If the downswing in inflation becomes a trend, there will be more pressure on the BOC policymakers to start to cut rates. As well, the strength of the economy is a key consideration – if Canada’s economy continues to weaken, the BOC may have to lower rates in order to avoid a recession. Conversely, higher inflation or stronger economic data would mean that the BOC could delay any rate cuts and continue to maintain the current cash rate of 5.0%.

In the Forex market, the softer-than-expected inflation report had limited impact on the direction of the Canadian Dollar against the US Dollar which climbed by 0.2% after the release.

The benchmark Canadian index, the S&P/TSX, started the day with slight gains but has retreated and at the time of writing was down 26.3 points (0.12%) at 21,232 points.

Ready to trade our Forex daily analysis and predictions? Here are the best Canadian online brokers to start trading with. 

Forex Today: Canadian Inflation Falls Faster – 21 February 2024

Canadian inflation data released yesterday showed that annualized inflation has fallen more quickly than expected, from 3.4% to 2.9%, when 3.3% was expected.

  1. Canadian CPI (inflation) data was released yesterday. It showed Canadian inflation has fallen much faster than expected, with the annualized rate falling from 3.4% to 2.9%. This will increase speculation as to when the Bank might begin cutting rates, so the Loonie weakened a little yesterday, but the Bank has made no public statements about rates, so it is all only speculation,
  2. Australian Wage Price Index data came in exactly as expected, increasing by 0.9% quarter by quarter.
  3. In the Forex market, the New Zealand Dollar has been the strongest major currency since the Tokyo open today. The Japanese Yen has been the weakest, as it falls further despite warnings from the Japanese Finance Minister Suzuki yesterday that he is watching the situation closely. The highest volatility recently has been seen in the USD/JPY currency pair, and in Yen crosses, although this is starting to decline.
  4. Bitcoin briefly made a new 20-month high above $52,884 yesterday before giving up all its gains of the day. Trend traders and investors will remain interested in Bitcoin on the long side.
  5. Global stock markets are mixed. Trend traders will still look to be involved on the long side of major US equity indices, despite last week’s losses, and day traders may consider trading these indices long if they show bullish momentum after the market opens.
  6. Cocoa futures regained more ground yesterday after Friday’s sharp fall, which lead to profit taking and the suggestion that the current leg of the long-term bullish trend may have ended. Trend traders will be watching closely and considering going long, especially if the price makes a full recovery and breaks to a new long-term high.
  7. The US Federal Reserve will release FOMC meeting minutes later today.

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Forex Today: RBA Minutes Show Rate Hike Was Considered

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

Inflation in Canada Falls to 2.9% in January – 21 February 2024

Canada’s CPI drops to 2.9% in January, first time below 3% since March 2021. Core inflation still high, BoC rate cuts uncertain. CAD rises slightly, S&P/TSX dips.

Canada’s Consumer Price Index (CPI) dropped to 2.9% year-on-year in January, down from 3.4% in December 2023 and below the market expectation of 3.3%. This marked the first time that inflation stood below 3% since March 2021. The main drivers of the downswing were lower prices for fuel, food and clothing on an annual basis. Monthly, inflation was flat (0%) in January, compared to -0.3% in December and below the market estimate of 0.4%.

The average of two of the Bank of Canada’s (BOC) core measures of inflation came in at 3.35% in January, below the December gain of 3.6%. Core CPI excludes food and energy items and is considered a more reliable indicator of inflation trends than CPI.

The good news is that headline inflation is once again within the Bank of Canada’s target range of 1%-3%. Still, the BOC’s goal is to reduce inflation to the 2% midpoint of the target range. Additionally, core CPI remains above the 3% upper band of the target range, which means that it is too early to declare victory against inflation.

Canada’s inflation rate has been zigzagging, as the decline in January followed an increase in December. This means that inflation’s path is uncertain, although the January data is clearly good news for the BOC.

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See full brokers list see-full-broker

When should the BOC start to lower rates? That is no simple question. The BOC hasn’t raised interest rates since June but unlike the United States Federal Reserve, is yet to signal that rate cuts are on the table. At last month’s rate meeting, the BOC did not give any hints that it was planning to lower rates.

There are two key factors that the BOC is monitoring to determine its rate path – 1) inflation and 2) economic activity.

If the downswing in inflation becomes a trend, there will be more pressure on the BOC policymakers to start to cut rates. As well, the strength of the economy is a key consideration – if Canada’s economy continues to weaken, the BOC may have to lower rates in order to avoid a recession. Conversely, higher inflation or stronger economic data would mean that the BOC could delay any rate cuts and continue to maintain the current cash rate of 5.0%.

In the Forex market, the softer-than-expected inflation report had limited impact on the direction of the Canadian Dollar against the US Dollar which climbed by 0.2% after the release.

The benchmark Canadian index, the S&P/TSX, started the day with slight gains but has retreated and at the time of writing was down 26.3 points (0.12%) at 21,232 points.

Ready to trade our Forex daily analysis and predictions? Here are the best Canadian online brokers to start trading with. 

Forex Today: RBA Minutes Show Rate Hike Was Considered – 20 February 2024

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

Forex Today: Bitcoin Threatens High Price

The price of Bitcoin has been rising steadily over recent days, and appears set to challenging the 20-month high price close to $53,000.

  1. Bitcoin is rising firmly and looks set to challenge the 20-month high set recently at $52,884. Trend traders and investors will be interested in Bitcoin on the long side.
  2. Global stock markets are mixed as the week gets underway. Trend traders will still look to be involved on the long side of major US equity indices, despite last week’s losses, and day traders may consider trading these indices long if they show bullish momentum after the market opens. The S&P 500 Index has regained the 5000 level.
  3. In the Forex market, the New Zealand Dollar has been the strongest major currency since the Tokyo open today. The Swiss Franc has been the weakest. The highest volatility recently has been seen in the USD/JPY currency pair, and in Yen crosses, although this is starting to decline. The US Dollar is showing some short-term weakness.
  4. Cocoa futures sold off strongly on Friday, leading to profit taking and the suggestion that the current leg of the long-term bullish trend may have ended. Trend traders will be watching closely and considering going long, especially if the price makes a full recovery and breaks to a new long-term high.
  5. There are public holidays today in both the USA and Canada.

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Forex Today: Bitcoin Threatens High Price – 19 February 2024

The price of Bitcoin has been rising steadily over recent days, and appears set to challenging the 20-month high price close to $53,000.

  1. Bitcoin is rising firmly and looks set to challenge the 20-month high set recently at $52,884. Trend traders and investors will be interested in Bitcoin on the long side.
  2. Global stock markets are mixed as the week gets underway. Trend traders will still look to be involved on the long side of major US equity indices, despite last week’s losses, and day traders may consider trading these indices long if they show bullish momentum after the market opens. The S&P 500 Index has regained the 5000 level.
  3. In the Forex market, the New Zealand Dollar has been the strongest major currency since the Tokyo open today. The Swiss Franc has been the weakest. The highest volatility recently has been seen in the USD/JPY currency pair, and in Yen crosses, although this is starting to decline. The US Dollar is showing some short-term weakness.
  4. Cocoa futures sold off strongly on Friday, leading to profit taking and the suggestion that the current leg of the long-term bullish trend may have ended. Trend traders will be watching closely and considering going long, especially if the price makes a full recovery and breaks to a new long-term high.
  5. There are public holidays today in both the USA and Canada.

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Forex Today: UK in Recession

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.