Market Drivers – US Session 17/10/2022

The US dollar was softer at the beginning of the trading week as UK news impacted global government bonds and the demand on the American currency.

The AUD/USD pair trades around 0.6280 after failing to retain gains above 0.6300, while USD/CAD is down to 1.3720, despite discouraging Canadian data. The Bank of Canada survey on business sentiment showed that it saw its worst drop since 2022.


US government bond yields recovered ahead of the close, ending the day pretty much unchanged, despite substantial gains among US indexes.

Economic Data

Statistics New Zealand has released the third quarter Consumer Price Index inflation data. New Zealand CPI (Q/Q) Q3 2.2% (est 1.5%; prev 1.7%) – CPI (Y/Y) Q3 7.2% (est 6.5%; prev 7.3%). The data can support the prospects of rate hikes from the Reserve Bank of New Zealand.

Other Developments

The GBP/USD surged to 1.1439, to later finish the day at around 1.1350. UK’s new Minister of Finance Jeremy Hunt announced the government would cancel most of the tax-related measures announced on September 23.

USD/JPY extended its rally, now hovering around 149.00 despite Japanese Finance Minister Suzuki announcing they would respond to speculative moves while warning they are observing FX “motions.”

Gold flirted with $1,670 a troy ounce but finished the day at around $1,647, easing ahead of Wall Street’s close. Crude oil prices were under mild pressure, with WTI now trading at around $84.85 a barrel.

The Bank of Canada released on Monday the Business Outlook Survey for Q3. The report says that “business confidence has softened”, “many firms expect slower sales growth as interest rates rise and demand growth shifts closer to pre-pandemic levels”.

The USD/CAD hovers near daily lows after the release hovering around 1.3735, weakened by a broader slide of the US dollar.

Regarding inflation, the report states there are early signs “that pressures on prices and wages have started to ease, but firms’ inflation expectations remain high.”

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