Yesterday, the Bank of Canada raised the interest rate by a quarter percentage point and announced the end of the tightening cycle. Nobody was surprised by such a rate hike. However, the announcement caught speculators off guard. Now, investors believe that other central banks may follow suit.

The US dollar took advantage of a fall in the Canadian dollar, rising to 102. However, the greenback failed to settle at this level yesterday. In the Asian session, it was trading lower at 101.6. It also made an attempt to consolidate in the daily range of 101.5-101.7.

Like many other currencies in the basket, the yen is trying hard to resume a steady movement. However, the bearish trend has prevailed for more than two months. Speculators stick to the carry trade strategy and it adversely affects the dollar/yen pair.

The spread between the US government bond yields and Japanese ones has been a strong driver for the pair until November last year. However, the strategy of making a profit from the difference in interest rates between the Bank of Japan and the Fed is not effective anymore. It is likely to become even less popular after the Bank of Canada announced the end of rate increases. Apart from that, the BoJ is likely to revise its ultra-soft stance.

Risk appetite is the main reason for a rise or a decline in the pair. If it is high, the greenback dips and the yen grows immediately. A similar situation took place today. Yen bulls pushed the pair to 129.6.

Today, the pair was able to recoup losses after a two-day losing streak, moving in the daily range of 129.0-129.7. Overall, the Japanese currency is aiming at higher levels, which could lead to volatility.

Trading floors in Australia are closed today on the occasion of the holiday in the country. However, the Australian currency largely reacts to external events. Today, they were extremely positive.

Following the reopening of the Hong Kong stock exchange after the 5-day holiday and ahead of US GDP data, the Aussie managed to break above the psychologically important resistance level of 0.7100.

Soaring inflation in Australia may force the RBA to hike rates more aggressively again. Given the regulator's previous remarks about the policy reversal, raising the benchmark rate even by a quarter percentage point could look like a hawkish move.

In the Asian session, the AUD/USD pair was trading near a 5-month high of 0.7120. It has been growing for 5 days in a row. Apparently, five is a lucky number for the bulls this week. In the morning, the pair was moving in the bullish corridor of 0.7092-0.7129.

The Kiwi, which started trading on Thursday near 0.6494, managed to climb. Like the Australian dollar, it was up mainly amid rising oil prices. However, the main drivers are political changes in the country as well as galloping inflation.

Perhaps it will force the Reserve Bank of New Zealand to become more aggressive. The NZD/USD pair was moving in the upward channel of 0.6470-0.6500 amid such expectations.

00:00 Intro
00:48 bulls and bears
01:30 VIX INDEX
02:27 USDX
03:33 USD/JPY
04:58 AUD/USD
06:12 NZD/USD

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