On April 13, as the US and Iran reached a "temporary ceasefire" and negotiations reached a stalemate, a prominent investor issued a fresh warning: even if the US economy faces difficulties, do not expect the Federal Reserve to rush to the rescue this time. Ruchir Sharma currently serves as Chairman of Rockefeller International, a wealth management and financial advisory firm. Originally established in 1882 as the family office for John D. Rockefeller's family, Rockefeller Capital Management now focuses on providing strategic advice to ultra-high-net-worth and high-net-worth individuals and families, as well as institutions and corporations. Rockefeller International is a division of the company aimed at expanding its business footprint in markets outside the United States. Sharma also founded the investment firm Breakout Capital, where he serves as Chief Executive Officer; the company primarily invests in emerging markets. In a recent interview, Sharma expressed his view that the Federal Reserve has limited room to maneuver in terms of cutting interest rates to stimulate economic growth. He pointed out that although rising oil prices pose a risk to economic growth, given that the inflation rate has been above the Fed's 2% target for 60 consecutive months, the central bank has very little space to ease monetary policy.
Furthermore, World Bank President Ajay Banga stated last Friday that even if the fragile ceasefire announced by US President Trump holds, the war in the Middle East will still have ripple effects on the global economy. He noted that if the ceasefire agreement fails to materialize and the conflict escalates further, the resulting damage would be even more severe. He added that under a baseline scenario, if the war ends early, global economic growth could decline by 0.3 to 0.4 percentage points; if the war persists, this decline could widen to as much as 1 percentage point. Simultaneously, the inflation rate could rise by 200 to 300 basis points; under a scenario of prolonged conflict, the inflationary impact would be more significant, potentially reaching up to 0.9 percentage points.
Key data to watch today includes Canada's Monthly Building Permits for February and the US Annualized Total for Existing Home Sales in March.
Gold / USD Gold traded with a mixed bias last Friday, closing slightly lower on the day. Profit-taking exerted some downward pressure on the pair, while overall positive US economic data released during the session also weighed on gold. However, a softening US Dollar Index, pressured by diminished expectations for Federal Reserve interest rate hikes, limited the extent of gold's decline. In early Asian trading today, gold gapped lower, pressured by renewed inflation concerns stemming from heightened tensions in the Middle East. The pair is currently trading around $2,350. Resistance can be seen near $2,400 today, with support around $2,325.
AUD / USD The Australian dollar moved lower in choppy trading yesterday, ending the day with modest losses. Besides profit-taking and technical selling pressure near the 0.7100 level, persistent risk-off sentiment and generally positive US economic data during the session also contributed to the downward pressure. In early Asian trading today, the AUD/USD pair gapped lower, influenced by renewed Middle East tensions, and is currently trading around 0.7040. Resistance is anticipated near 0.7150 today, while support is found around 0.6950.
USD / CAD The USD/CAD pair edged higher in volatile trading last Friday, closing the day with slight gains. The pair is currently trading near 1.3860. Support stemmed from short-covering and technical buying interest near the 1.3800 psychological level. Additionally, persistently declining crude oil prices provided some support for the pair. Weak economic data from Canada released during the session also contributed to the pair's strength. Resistance is seen near 1.3950 today, with support around 1.3750.
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