FX Morning Update December 2, 2011
USD/CAD Open: 1.0120-24 Overnight Range: 1.0084-1.0155
The Canadian dollar was rather quiet overnight before the US and Canadian jobs data were released this morning. Canadian jobs data was worse than expected with -18.6k jobs (expected +18k), while the US jobs data came in at +120k (+125k expected) but the US jobless rate fell from 9% to 8.6%, surprisingly positive, and historical jobs data was also revised upwards to indicate job growth. Oil is at $101.97 and gold is at $1,759. NY futures are positive.
The short term Canadian dollar technicals remain negative while above par, but the loonie has gained significant momentum of late. For today, USD resistance is at 1.0180, 1.0220, 1.0274, and 1.0320. Support is at 1.0140, 1.0110, and 1.0050.
While the Canadian jobs data was weaker than expected, the focus is on the US data, which was slightly positive boosting sentiment. What’s good for the US is good for Canada and the expected positive gains in the US will trickle down to Canada eventually. Germany and France are humming the tune of a joint effort for budget reforms for eurozone members, which the market seems to believe is a solution in the right direction. German Chancellor Merkel announced overnight that they are ready to take “big steps” at an upcoming euro summit next week. The loonie bulls have been riding a German and France initiative to create eurozone budget reforms, positive US data of late, and global coordinated central bank action to reduce the cost of obtaining US dollars. Loonie bears have been wondering why the market is believing these headlines as the eurozone issues are structural and will take a long time to fix impacting global growth through deleveraging. Despite the data releases, the loonie has been driven primarily by risk sentiment and expect this to continue and to be primarily driven by eurozone issues.
Today’s Range: 1.0050 – 1.0175
Daily Market | Knightsbridge Foreign Exchange
By Admin | December 2, 2011 | Daily Update |
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