USD/CAD:Oil Weakness and Financial Turmoil Shake Markets ⤴️
On Wednesday, the USD/CAD experienced a wild ride due to renewed pressure on oil prices, which weakened the Canadian Dollar and sent the pair to the 1.3800 level. The price pressure on oil started with rumors swirling around Credit Suisse bank, which was seen as a potential victim of the fallout from Silicon Valley Bank's financial crisis. This led to some perceived threats attributed to Credit Suisse that could have been tangled up with SVB's situation, causing panic among investors.
While all allegations against Credit Suisse's CEO have been denied, the Swiss banking regulator intervened and promised to provide liquidity solutions if needed, which did little to calm markets. The situation triggered a fresh wave of sell-offs among risky assets, with oil prices taking the biggest hit. West Texas Intermediate (WTI) fell below the $70 mark as investors started to worry about surging borrowing costs and the potential cracks in financial systems.
The corrective downturn in oil prices that began earlier this week has given a boost to USD/CAD, but falling US Treasury yields are keeping a lid on any appreciation in the US Dollar. The pair is mainly being driven by oil prices, rather than any other factor, as the Bank of Canada has paused its rate hiking cycle.
Meanwhile, the US released its Retail Sales figures and Producer Price Index (PPI) data for February on Wednesday. The Retail Sales figures were downbeat, with a MoM reading of -0.4% compared to the previous month's 3.2%, and a Control Group reading of 0.5% compared to the previous 2.3%. However, there were some signs of relief in the PPI data, with a MoM reading of -0.1% from the prior 0.3%, and a YoY reading of 4.6% from the prior 5.7%.
Overall, the financial turmoil triggered by rumors surrounding Credit Suisse and concerns over oil prices has sent shockwaves through markets, causing investors to worry about the potential impact on global financial systems.
While all allegations against Credit Suisse's CEO have been denied, the Swiss banking regulator intervened and promised to provide liquidity solutions if needed, which did little to calm markets. The situation triggered a fresh wave of sell-offs among risky assets, with oil prices taking the biggest hit. West Texas Intermediate (WTI) fell below the $70 mark as investors started to worry about surging borrowing costs and the potential cracks in financial systems.
The corrective downturn in oil prices that began earlier this week has given a boost to USD/CAD, but falling US Treasury yields are keeping a lid on any appreciation in the US Dollar. The pair is mainly being driven by oil prices, rather than any other factor, as the Bank of Canada has paused its rate hiking cycle.
Meanwhile, the US released its Retail Sales figures and Producer Price Index (PPI) data for February on Wednesday. The Retail Sales figures were downbeat, with a MoM reading of -0.4% compared to the previous month's 3.2%, and a Control Group reading of 0.5% compared to the previous 2.3%. However, there were some signs of relief in the PPI data, with a MoM reading of -0.1% from the prior 0.3%, and a YoY reading of 4.6% from the prior 5.7%.
Overall, the financial turmoil triggered by rumors surrounding Credit Suisse and concerns over oil prices has sent shockwaves through markets, causing investors to worry about the potential impact on global financial systems.
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