CAD hits 5-month high

“Every problem is a gift—without problems we would not grow.” – Anthony Robbins

HEADLINES

• Canadian dollar notches 5-month high as exports climb

• Gold largely unchanged as Ukraine risks counter rising yields

• Oil climbs on prospect of fresh Russia sanctions

• Stocks fall, bond yields jump following Brainard comments

• AUD/USD to enjoy further upside towards May 2020 high at 0.7883/92 – Credit Suisse

• GBPJPY Near Term: Downside favored

FOREX

Canadian dollar notches 5-month high as exports climb

The Canadian dollar strengthened to its highest in nearly five months against its U.S. counterpart on Tuesday, as the threat of additional sanctions on Russia boosted oil prices and data showed Canada’s exports climbing to a record high in February.

Gains for the Canadian dollar came as other commodity-linked currencies moved higher, including a 1.2% jump in the Australian dollar after the Reserve Bank of Australia dropped its pledge to be “patient” on hiking interest rates.

Commodity currencies gain, led by Aussie dollar; euro falls

Commodity currencies rallied in choppy trading on Tuesday led by the Australian dollar, boosted by the prospect of policy tightening by the Reserve Bank of Australia (RBA), while the euro fell on French election worries and the likelihood of more sanctions on Russia over Ukraine.

COMMODITIES

Gold largely unchanged as Ukraine risks counter rising yields

Gold held steady on Tuesday as safe-haven demand spurred by the possibility of new sanctions on Russia countered a rise in U.S. Treasury yields and expectations of interest rate hikes by the Federal Reserve.

Investors awaited the release on Wednesday of the minutes from the Fed’s last policy meeting for clues on its rate hike trajectory. Rising U.S. interest rates increase the opportunity cost of holding non-yielding gold, while boosting the dollar.

Oil climbs on prospect of fresh Russia sanctions

Oil prices rose on Tuesday as Europe announced plans to impose new sanctions on Russian oil imports to punish Moscow over alleged war crimes in Ukraine, raising concerns over tighter global supply.

Ole Hansen, head of commodity strategy at Saxo Bank, expects oil prices to trade between $90 and $120 a barrel during the second quarter.

Any signs that the United States and Iran are moving closer to a nuclear deal, which would return up to 1.3 million barrels per day of Iranian oil to global markets, would weigh on oil prices, BCA research said.

STOCKS

Stocks fall, bond yields jump following Brainard comments

Stocks on global indexes were lower on Tuesday while U.S. Treasury yields rose to multi-year highs as comments from U.S. Federal Reserve Governor Lael Brainard put investor focus on the possibility of aggressive monetary policy tightening.

The Nasdaq led the decline on Wall Street, with higher rates seen as a negative for growth stocks.

Investors were also watching for further developments on possible new sanctions against Russia after dead civilians were found in Ukraine.

ANALYSIS

AUD/USD to enjoy further upside towards May 2020 high at 0.7883/92 – Credit Suisse 

“Though a sustained close above the late June high at 0.7599/7616 is needed to confirm the medium-term turn higher, our bias is for this to be achieved. Thereafter, resistance would be seen at .7644/51 initially, then further above at the June high at 0.7777/85 and eventually at May 2020 high at 0.7883/92, which now serves as our first medium-term goal. “

“Medium-term momentum remains outright bullish, whilst medium-term moving averages are turning higher.”

CHART

GBPJPY Near Term: Downside favored

Technical View: Short position below 162.2. Target 158.7. Conversely, break above 162.2, to open 162.8.

Comments: The pair is expected to resume descend after correction.

Source: Trading Central

CALENDAR

*Times in GMT

Source: FX Street Economic Calendar

Footnotes

https://www.cnbc.com/2022/04/05/forex-markets-reserve-bank-of-australia-euro.html
https://www.cnbc.com/2022/04/05/gold-markets-dollar-us-federal-reserve-russia-sanctions.html
https://www.cnbc.com/2022/04/05/oil-markets-russia-ukraine-war.html
https://www.reuters.com/business/global-markets-wrapup-1-2022-04-05/
https://www.fxstreet.com/news/aud-usd-to-enjoy-further-upside-towards-may-2020-high-at-07883-92-credit-suisse-202204051319
https://www.reuters.com/business/euro-wallows-ukraine-sanctions-worries-aussie-calm-before-rba-2022-04-05/