FX Morning Update August 31, 2011
USD/CAD Open: 0.9801-03 Overnight Range: 0.9768-0.9802
The Canadian dollar traded quietly overnight. Yesterday’s Fed minutes were largely uneventful as the open market committee reiterated they have tools to stimulate the economy but some members did indicate they were ready to act boldly in August. In addition, US consumer confidence was worse than expected yesterday. NY futures are pointing higher. Oil is at $87.74 and gold is at $1,830. Canada releases GDP data, while US ADP payroll and manufacturing data is released in the US.
The short term Canadian dollar technicals remain negative while the longer term Canadian technicals remain bullish. USD/CAD has traded between 0.9750 to 0.9950 over the last several weeks in rangebound trading. For today, USD resistance is at 0.9797, 0.9850, and 0.9905. Support is at 0.9747, 0.9700, 0.9667, 0.9615, and 0.9530.
Volatility and uncertainty was the theme in August as traders try to determine the path of the US and global economies. Themes remain managing country debt levels while growing the economy and jobs and it may be difficult to achieve both at the same time. The loonie continues to remain tied to equities, oil prices, and risk. While many have now come to expect weak US data, there have been some rosy datapoints such as consumer spending and durable goods orders, potentially indicating that things may not be so bad for the US. That being said, treasury yields are extremely low, indicating many are happy to simply park their money for safety. Jobs data released at the end of the week could move markets. With month-end today, look for some to position squaring and rebalancing of portfolios causing some demand for the USD, while Canadian GDP data should also directionally move the loonie.
Today’s Range: 0.9745 – 0.9845
Rahim Madhavji | Knightsbridge Foreign Exchange
By Admin | September 11, 2011 | Daily Update |
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