Bonda Asia: Crude oil prices fell sharply USD/CAD rebounded to close higher

The RBA warned in the morning that further rate hikes would be needed in the future as inflation would rise to its highest level in nearly 30 years, which would make it possible for the economy to slow further and make it difficult to maintain "plateau"
.
In its latest 72-page quarterly monetary policy statement, the RBA sharply lowered its growth outlook, revised its inflation forecast upwards and predicted that unemployment would rise from next year, although it did not predict a recession
.
In the face of high price pressures, the RBA has raised its cash rate for four consecutive months, rising from a record low of 0.
1% to a seven-year high of 1.
85%, and the market expects the rate to reach 3.
0% before Christmas and peak
at around 3.
30% in April next year.
"The committee expects to take further steps to normalize the monetary policy environment in the coming months, but does not prescribe a path
.
" The statement said
.
The RBA expects the unemployment rate to fall further to 3.
25% by the end of the year and then slowly rise to 4%
by the end of 2024 as the economy slows.
As the job market remains tight, companies need to attract workers
through means such as wage increases.
Wage growth is expected to reach 3.
0% this year and 3.
6% next year, and could rise further to 3.
9% in 2024, the highest in
recent years.

Separately, Cleveland Federal Reserve Bank President Mester said on Thursday that the Fed should raise interest rates above 4% to curb the current high inflation and must commit to continuing to tighten policy
in the first half of next year.
"I think it's appropriate to raise the rate above 4 percent," Mester said
after an event at the Economic Club of Pittsburgh.
The comments made her one of the most hawkish members of
the Federal Open Market Committee (FOMC).
Mester reiterated comments made earlier this week that it needed to see inflation fall
for months in a row before policymakers could ease tightening monetary policy.
"Rates will continue to rise this year and the first half of next year, and maybe then we can pause rate hikes and start bringing rates back," Mester said
.
The Fed will hold its next policy meeting
on September 20-21.
Mester said she is open to
a rate hike by then.
She pointed out that it may be reasonable to think that we may need a 75 basis point rate hike, but I think it may be 50 basis points and we will be guided
by the data.

Today's data to watch are Germany's quarterly industrial output m/m in June, France's trade balance for June, the US non-farm payrolls change in July after the seasonal adjustment, Canada's July unemployment rate and Canada's July IVEY seasonally adjusted PMI
.

XAU/USD

Gold rebounded sharply yesterday, updating a four-week high, and is now trading around
1792.
In addition to the weakening of the dollar index under the combined pressure of multiple negative factors, which provided strong support for gold, the weak initial jobless claims data and the decline in U.
S.
Treasury yields during the session were also important factors
supporting gold.
In addition, gold's intervention in attracting some technical buying after breaking through the pressure of the 1780 mark also intensified gold's gains
.
Watch for pressure around 1800 today, with lower support around
1780.

AUD/USD

The Australian dollar fluctuated to the upside yesterday, closing slightly higher on D1, and the pair is trading around
0.
6970.
In addition to the weakening of the US dollar index under the combined pressure of multiple negative factors, the rebound of commodity international copper, iron ore and other prices is also an important factor
supporting the rebound of commodity currencies in the Australian dollar.
In addition, the pair was supported by good economic data from Australia during the session
.
Watch for pressure around 0.
7050 today, with support around
0.
6900 below.

USD/CAD

USD/CAD fluctuated to the upside yesterday, closing slightly higher on D1, trading around
1.
2870.
In addition to short covering, which has provided some support to the exchange rate, the sharp decline in crude oil prices under the pressure of negative factors such as the expected return of Iranian crude oil to the market and demand concerns is the main reason for
supporting the rebound of the exchange rate.
However, the weakening of the dollar index limited the room for
the pair to rebound.
Watch for pressure around 1.
2950 today, with support around 1.
2800 below
.