FX Morning Update August 16, 2011

USD/CAD Open: 0.9865-69 Overnight Range: 0.9801-0.9871

The Canadian dollar traded weaker overnight. Overnight, European growth data fell more than expected (1.7% Act. vs. 1.8% F) and German growth data was also weaker than expected. Walmart and Home Depot reported positive earnings this morning. Yesterday, increased market sentiment from M&A activity boosted markets. Oil is at $86.44 and gold is higher at $1,785. NY futures are pointing lower today. Industrial production and capacity utilization data is released today.

The short term Canadian dollar technicals remain negative. For today, USD resistance is at 0.9955, 0.9974, 0.9999, and 1.0060. Support is at 0.9850, 0.9813, 0.9750, and 0.9667.

French and German ministers are meeting today to discuss the sovereign debt issues in the eurozone and the results could move markets. Corporations that have reported earnings have beat estimates 70% of the time. M&A activity led to positive market sentiment yesterday but the tide can quickly turn as outstanding risks such as eurozone debt issues are far from being resolved and headlines and rumors seem to drive risk off easily. The Bank of Canada holds a wildcard as some traders are expecting a rate drop while others expect the rate to hold firm and the latter could boost the loonie if language is tilted towards combating inflation early next year. The loonie should continue to trade based on headlines from Europe and directionally with oil and equities.

Today’s Range: 0.9805 – 0.9895

By Admin | September 11, 2011 | Daily Update | 0 comments

Leave a Comment

Popular Content