The U.S. Dollar is trading in stronger ranges across the board to begin the week following a quiet Friday with important crucial employment data revealing a strong labor sector.
Overview
Although we are gauging what effects the labor figures will have on Fed policy, today remains a quiet day for a full assessment as Europe, Australia, and Hong Kong remained at home in observance of the Easter holidays. Meanwhile, equities are trying to still get some action in the midst of disappointment with Apple Inc. after a report of sliding PC sales and shipments.Our thoughts initially are that the resilient employment situation gives the Fed room to increase interest rates further down the line and eliminates the thought of cutting interest rates at any point this year. Thus far though, the buck has not flourished post-release, as if markets thought the figures would not mean the Fed would add to their hawkishness. On the Pacific Rim, Bank of Japan’s Governor Kazuo Ueda gave his first news conference as head of the BOJ and explained that monetary policy as it stands is not changing right away.
What to Watch Today…
- No major economic events are scheduled for today
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CAD ⇓
The Canadian Dollar is down as most of its peers against the buck as markets have to account for the likelihood of no end to Fed interest-rate hikes in 2023. It could be a moment of depreciation for the “Loonie” as we watch the Bank of Canada decision on Wednesday following a March meeting in which officials chose not to increase their Overnight Rate Target, currently standing at 4.5%. Employment numbers have been stubbornly strong, particularly wage growth that maintains inflation above the central bank’s target. It may not be enough to cause a change of heart as economists worry that adding too much to borrowing costs will start troubling economic growth.
JPY ⇓
The Japanese Yen is down by about 1.0% this morning following a quiet session that still lacks most of Asia and Europe to properly react to dovish tones from the BOJ. Indeed, BOJ head Ueda spoke to the press leaving the impression that his reign might not mean an automatic change of monetary policy. Furthermore, Ueda assessed that controlling the yield curve as the BOJ has been most appropriate. Moving forward, Yen will be tested in a major way as the BOJ may not meet any of the market’s expectations for a change of the guard when it comes to stepping away from an easing and accommodative financial environment.
