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https://tronscan.org/#/transaction/4761dbcb2c16b1515c1dc0497a9609057d003f2dcc38079819f81d89e94a1b6e
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💸 The euro rebounded on weaker U.S. jobs data
The euro (EUR) declined on Tuesday but rebounded from the 1.08600 level due to lower-than-expected U.S. JOLTs Job Openings figures.
👉 Possible effects for traders
The number of job openings decreased by 296,000 to 8.059 million in April 2024, marking the lowest level since February 2021 and falling below the market forecast of 8.34 million. The recent softer U.S. macroeconomic data indicate signs of a cooling economy and reinforce expectations of an imminent interest rate cut by the Federal Reserve (Fed) later this year. These expectations maintain low U.S. Treasury bond yields and weaken the U.S. dollar (USD), providing some support to EURUSD. However, the gains appear limited as traders might prefer to remain cautious ahead of Thursday's European Central Bank (ECB) monetary policy meeting.
As policymakers have widely signalled in recent weeks, the ECB is expected to cut interest rates by 25 basis points at the meeting on 6 June. This is expected to be the first rate cut since March 2016 and will coincide with the release of the latest economic projections. Additionally, traders will examine comments from ECB President Christine Lagarde for insights into the interest rate path following the rise in eurozone inflation in May. These factors will play a crucial role in affecting the EURUSD trend.
EURUSD declined slightly during the early European trading session. Today, traders should focus on two key U.S. reports: the ADP Employment Change at 12:15 p.m. UTC and the ISM Services Purchasing Managers' Index (PMI) at 2:00 p.m. UTC. These releases may trigger some volatility in USD pairs. If the figures are better than expected, it will almost certainly push EURUSD lower, potentially below 1.08600. Conversely, if the figures disappoint, the bullish trend in EURUSD will likely extend, and the pair may rise towards 1.09100.
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USD HIGH IMPACT OF THE DAY‼️
• Unemployment Claims
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🇨🇦 Market awaits Bank of Canada's interest rate decision
USDCAD gained 0.36% on Tuesday as the U.S. Dollar Index (DXY) corrected upwards following a sharp decline towards 104.00.
👉 Possible effects for traders
The latest Bank of Canada (BOC) Gross Domestic Product (GDP) data released on Friday showed that economic growth remained flat after a strong rise of 0.5% in January. The real gross domestic product grew by 0.4% in Q1, equivalent to an annualised rate of 1.7%. This figure fell short of the forecasted 2.3% rise and the Bank of Canada's April projection of 2.8%. The annualised growth rate for the previous quarter was revised down to 0.1% from 1%. Additionally, the regulator's core inflation measures have shown improvement. The year-on-year increase in the Consumer Price Index (CPI) eased from 3.2% to 2.9% in April, while the annual rate of the CPI median also decreased from 2.9% to 2.6%.
Douglas Porter, chief economist at BMO Financial Group, noted that Canada's economy has expanded by a meagre 0.5% in the past year. 'While the downside surprise in Q1 was driven by a big cut in business inventories, the reality is that underlying growth remains well short of potential, and slack is building for the overall economy,' he wrote in a report following the GDP release. 'For the Bank of Canada, we believe the main message is that the output gap is widening, as reinforced by a less-tight job market, modestly increasing the chances of a rate cut next week (5 June),' he added.
USDCAD declined slightly during the Asian and early European trading sessions. Today's main event is the BOC interest rate decision, due at 1:45 p.m. UTC. The Bank of Canada is anticipated to reduce its policy interest rate by 25 basis points to 4.75% in response to high mortgage rates and borrowing costs amid easing inflation and slower economic growth. However, some economists suggest the bank might delay the rate cut until July. If the regulator delivers the rate cut, the Canadian dollar will weaken, while USDCAD will rise. Conversely, if the rate remains unchanged, it will surprise market participants and could trigger a sharp decline in USDCAD, possibly falling below 1.36000.