Canadian Dollar Update January 22, 2016
USD/CAD Open: 1.4167-1.4168 Overnight Range: 1.4139-1.4301
The Canadian dollar was rangebound in overnight currency exchange markets. Oil is at $31.04 and gold is at $1,097. US futures are higher. Today, Canada releases CPI data for December of 2015.
The short term Canadian dollar technicals are neutral. For today, USD resistance is at 1.4422. Support is at 1.4042.
The Canadian dollar is outperforming today, as oil prices are better supported by the expectation of additional easing by the ECB later in the year, as well as China’s liquidity injections earlier this week. The major culprits in CAD’s earlier decline, oil prices and yield spreads, have appeared to moderate in the short-term. Yield spreads between Canada and the US are narrower, and oil prices have rebounded above $30/barrel.
However, the domestic economy still appears sluggish. CPI contracted 0.5% in December, a bad sign for the Bank of Canada’s inflation target. Market developments over the next few weeks will better clarify the outlook for the Canadian dollar. We do not that most of the long-term drivers of the Loonie are still not favourable. It remains indeterminate how high the Loonie can fly.
Today’s Suggested Range USD/CAD: 1.4150 – 1.4250
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 | January 22, 2016 | Daily Update |
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