Foreign Exchange Market News (Canadian Dollar and US Dollar)
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Foreign Exchange Morning Update June 30, 2011
USD/CAD Open: 0.9672-75 Overnight Range: 0.9659-0.9703
The Canadian dollar continued its uptrend overnight passing the 0.9700 mark with little resistance. Yesterday, Greek parliament passed austerity measures paving the way to receive expected bailout funds. Asian markets were up overnight as well. The Euro has reached a 3 month high vs. the US on rate hike expectations and reduced Greece risk. Oil is higher again and is at $94.53 and gold is flat at $1,509. Canada releases important GDP data today. The US releases jobless claims and Chicago PMI.
The short term Canadian dollar technicals are mixed. It will be interesting to see if the loonie is back in its sideways trading pattern between 0.97 to 0.98 or if a short term Canadian dollar uptrend can resume if the loonie can keep its gains and have a firm move higher. The longer term Canadian dollar uptrend is still intact. For today, USD support is 0.9610, 0.9580, and 0.9515. Resistance is at 0.9750, 0.9810 and 0.9898.
A much weaker than expected GDP report today could take the wind out of the sails in the loonie as rate hike expectations would be decreased. With month and quarter end, corporate repatriation, portfolio rebalancing and equity window dressing could all add to volume today and perhaps be USD positive. Traders have run back in to equity markets as they believe the chance of an imminent Greek default is slimmer. However, let’s not forget that much remains to be done on this issue. The US debt ceiling issue continues to pose a risk, although many have implied a low probability to a default. While August 2nd is an important deadline, credit agencies could act sooner by reassessing their outlook on the US in mid to late July, which could rattle markets. Traders could also trim risk positions ahead of a long weekend with eurozone meetings and potential uncertainty.
Today’s Estimated Range: 0.9620 – 0.9720
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