Canadian Dollar FX Update December 18, 2015
USD/CAD Open: 1.3989-1.3990 Overnight Range: 1.3906-1.4002
The Canadian dollar was rangebound in overnight currency exchange markets. Oil is at $34.78 and gold is at $1,056. US futures are lower. Today, Canada releases CPI data for November.
The short term Canadian dollar technicals are neutral. For today, USD resistance is at 1.4038. Support is at 1.3830.
The Canadian dollar remains weak early this morning. Canadian CPI data missed expectations slightly, which thusfar has had a muted effect. CAD’s two main drivers, oil prices and yield spreads, have both been weighing on the Canadian dollar. 2Y yield spreads continue to widen between Canada and the US, highlighting divergent monetary policy. Oil prices remain low, as WTI is below $35/barrel at the moment.
Persistent low oil prices could elicit a reaction in Canadian monetary policy, as the BoC has shown a willingness to react to low oil prices earlier in 2015. Currently, markets are pricing in a 40% chance of 25bp rate cut in Canada over the next 12 months. Additionally, markets are still digesting the Fed decision from earlier this week.
Today’s Suggested Range USD/CAD: 1.3950 – 1.4050
Sincerely,
Rahim Madhavji | Knightsbridge Foreign Exchange | Toll-Free: 1-877-355-5239
www.knightsbridgefx.com
Knightsbridge Foreign Exchange has based the opinions expressed herein on information generally available to the public. Knightsbridge Foreign Exchange makes no warranty concerning the accuracy of this information and specifically disclaims any liability for trading decisions based on the opinions expressed and information contained herein. Such information and opinions are for general information only and are not intended to present advice with respect to matters reviewed and commented upon.
By Admin | December 18, 2015 | Daily Update |
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