Author: Mr. Amar – Technical Analyst
According to US Treasury Secretary, Janet Yellen, the rise in inflation rates were unexpected by them and also most economist. If the US is successful in controlling the pandemic, she sees inflation easing over the course of 2022. Secretary Yellen demands confidence in the fed’s ability to make appropriate judgments on the economy. In the conflict between US and Russia over Ukraine, US Treasury is prepared to impose significant consequences.
With this being said, pairs traded against US Dollar are now showing its impacts by the aggressive movements. After coming in for the third week of 2022, USD/CAD has always been on bearish momentum due to inflation rate hikes. By tapering the rate, US currency will once on the climbing side and gain strength, this is what the Fed and economist believes. As stated before, expected will be four rate hikes for this year in order to ease down the inflation issue and also need to see how well US Government contain the spread of Covid cases.
The central bank’s Federal Open Markets Committee (FOMC) is expected to convene its two-day monetary policy meeting on Tuesday, at the conclusion of which market participants will closely parse the committee’s statement regarding the tightening timeline. Currencies are sticking to the range, waiting on central banks next week and also market expectations have arguably become overly aggressive with respect to hawkish Fed policy, according to US Federal Reserve.