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Canadian Currency Jumps As Traders Bet On Further Rate Hikes

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marketmakers.com

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perry@marketmakers.com

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Fri, Jun 9, 2023 04:23 PM

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Plus Get Market Makers AI Forex Trading Software At Our Best Price Yet!͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ ͏ ‌ MARKET MAKERS DAILY BULLETIN Hello investor The Bank of Canada surprised the world by restarting its rate-hiking cycle with a 25 basis-point hike to combat accelerating inflation. Now, traders are betting that the BOC will do another similar-sized hike by the end of September, leading to a jump in its local currency. The Canadian two-year bond yield rose more than 20 basis points to 4.59% – the highest level since 2007. The Canadian dollar jumped 0.6% to hit its highest since May. The current interest rate is at 4.75% after the recent hike, and the bank said there is still “excess demand” in the economy. - “Overall, excess demand in the economy looks to be more persistent than anticipated,” the bank said. The bank is worried that inflation could get “materially stuck” above 2%, said Shane Osborne, chief FX strategist at Scotiabank. Governor Macklem hinted back in May that it is something that could lead to another rate hike, and he clearly thought that the scenario is becoming a reality. At the same time, traders started to pull back on their bets that the US central bank could start cutting rates this year. In other words, they think higher interest rates are here to stay for a longer time. Central banks from the US, Europe and Japan will announce their rate decisions next week. How will the Federal Reserve affect the Canadian dollar? It is likely to depend on the tone of Fed officials. If they sound dovish, that would be positive for the loonie. - “...we will need confirmation that the Fed is taking a much more dovish stance than markets are discounting for,” said Jay Zhao-Murray, a currency analyst at Monex Canada in Toronto. Win Thin of Brown Brothers Harriman thinks the Fed may hike rates after Australia and Canada choose to hike rates recently. The reason is simple – the US economy shows some similarities with the other two countries, so the Fed may follow the same gameplan. - “To me, the RBA and BOC moves this week make it more likely the Fed hikes again, not less,” said Win Thin, global head of currency strategy at Brown Brothers Harriman. - “The statements from RBA and BOC are nearly identical in tone. The Fed could basically cut and paste and tell the same story here in the US.” OUR REVOLUTIONARY AI FOREX TRADING SOFTWARE IS NOW AVAILABLE FOR JUST $99 A MONTH! DON'T MISS THIS LIMITED TIME OFFER! [GET MARKET MAKERS FOR $99 A MONTH](~/AASl5QA~/RgRmZdcKP0SZaHR0cHM6Ly9vZmZlcnMubWFya2V0bWFrZXJzLmNvbS9tYXJrZXRtYWtlcnMtc2VsZi1zZXJ2ZS1tb250aGx5LXN1YnNjcmlwdGlvbi8_X2t4PVRKRngtMDZyYnh4NlVhSmNfTGdfanYtSTljYWxkbVI1VDVPY0RFSGIydk1HVzZXNVpZUWtaTDhJT1paT2ZBVG8uVzVwQVpXVwNzcGNCCmR_ClKDZFgH6K1SG3RyaXN0cmFtYmFsZHdpbjkxQGdtYWlsLmNvbVgEAAQLVg~~) No longer want to receive these emails? [Unsubscribe](~/AASl5QA~/RgRmZdcKP0SoaHR0cHM6Ly9tYW5hZ2Uua21haWwtbGlzdHMuY29tL3N1YnNjcmlwdGlvbnMvdW5zdWJzY3JpYmU_YT1XNXBBWlcmYz0wMUdTMEg3M1I2MDJNWU5ZOERHNUIwVkFXQiZrPWFmZDNmZjkzODVlM2RlNGU0N2Q0NzdmMGQxNDI1MmQyJm09MDFIMkdGQUgxSDNTRTlBTVhKUzI1WDYzWFQmcj1XaktYTWJCVwNzcGNCCmR_ClKDZFgH6K1SG3RyaXN0cmFtYmFsZHdpbjkxQGdtYWlsLmNvbVgEAAQLVg~~).

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