USD/CAD TUMBLES BELOW 1.3700 AS THE US DOLLAR GETS BATTERED

USD/CAD falls as Japanese authorities confirm intervention and sell US dollars. San Francisco Fed Mary Daly said more tightening is needed to push interest rates lower. Canadian retail sales in August exceeded expectations, in September expectations were on the contrary -0.5%. USD , /CAD fell from around the day’s highs of 1.3850 to the 1.3660s area as US Treasury yields fell on news that Fed officials are looking to cut rates at their December meeting. In addition, speculation about Japanese government intervention increased as USD/JPY fell from 151.60 to an intraday low of 1 7.16. At the time of writing, USD/CAD is trading at 1.3662. , US stocks trade in the green on Fed pivot. The WSJ article commented that Fed officials are estimating the size of a December rate hike, with 75 basis points in November most likely. San Francisco Federal Reserve Bank President Mary Daly echoed those comments that more tightening is needed, adding that „we (the Fed) are not going to continue to go up to just 75bps on Friday.” He noted that a slowdown should be considered „for now.” On Thursday, the president of the Philadelphia Fed Patrick Harker and the newest member of the board of the Fed, Lisa Cook, said that the Fed needs to raise interest rates. He added that he was „disappointed by the lack of progress in containing inflation” and expected interest rates to be above % in 2023. , A lack of US economic data misled traders in Thursday’s releases. US economic data, ie. the amount of unemployment benefits increased less than expected, which showed the tightening of the labor market. Additionally, the Philadelphia Fed’s manufacturing index improved in October, but came in below forecasts and remained below zero for 5 straight months. On the Canadian side of the calendar, retail sales rose 0.7% in August, beating estimates of 0.2%, while estimates for September fell 0.5%. The Canadian dollar was also supported by oil prices, with WTI rising 0.09% to $85.25 a barrel on increased demand for cuts from China and OPEC and its allies.

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