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The Week Ahead – Bulls charge in the hope of Fed pivot

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USDCAD holds as BoC may go dovish

The Canadian dollar falls as the Bank of Canada may offer lower-sized interest rate rises. Although inflation remains high in October, signs that it is peaking could indicate a slower pace for tightening. Since the central bank is now focusing on fine-tuning the terminal rate, and not overshooting it, the goal has been to keep prices under control. This would avoid recessionary pressures. In the future, the BoC may increase the BoC’s interest rate by small amounts. A 50bp surprise would be the upside risk for loonies. The pair is looking for a recovery. 1.3800. 1.3250 This is the first support.

As recession risk recedes, AUDUSD rises

The Australian dollar is still climbing as riskier currencies are impacted by rising inflation. The monthly CPI in Australia rose 6.9% in October from 7.3% in September. This was due to a sharp drop in the cost of fresh produce, holidays, and other costs. The RBA had expected prices to reach about 8% by the year’s end, but more signs that inflation might be peaking could be a pleasant surprise for policymakers. The RBA expects that tightening will be halted by the end of the year, which could help to bring the growth-sensitive Aussie back on track.



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