📉 International:

Canada Leads with Rate Cut, Positive Signs from US Employment Data

On Wednesday, the Bank of Canada cut its key interest rate by 25 basis points, from 5% to 4.75%, as expected. Governor Tiff Macklem hinted at further rate cuts if inflation eases. This move led to a short-term increase of approximately 40 points in the USD/CAD, with Canadian stocks and bonds also rising. The latest US ADP employment data showed an increase of 152,000 jobs in May, the lowest in three months, with April figures also revised downwards. Analysts now see a nearly 70% chance of a 25-basis-point rate cut in September. US Treasury prices rose, and the 10-year yield fell to around 4.287%, the lowest in over two months. In the forex market, the yen ended a two-day rise, USD/JPY climbed to nearly 156.230, and the offshore yuan (CNH) fell below 7.2561 before rebounding after the ADP release.

🇦🇺 Australia:

Commodity Price Drop Puts Pressure on AUD

This week, AUD/USD saw a slight decline. The US JOLTS report revealed a significant drop in April job openings, the lowest in over three years, raising global economic growth concerns. Commodity prices, including iron ore, hit a seven-week low, weighing on the AUD. However, the downside for the AUD is likely limited, as bets on a Fed rate cut in September and falling US yields provide support. Technical indicators show strong support around 0.6650, suggesting AUD bulls remain resilient unless the 0.66 level is breached, which could signal a bearish trend.