FX Morning Update November 30, 2011
USD/CAD Open: 1.0271-74 Overnight Range: 1.0255-1.0362
The Canadian dollar continued to rally overnight vs. the USD. Overnight, China cut bank reserve requirements by 0.5% and this has boosted equities, even though India reported its lowest GDP growth rate of 6.9% yoy in quite some time. Oil is at $101.16 and gold is at $1,737. NY futures are pointing higher today. Today, Canadian GDP data is released.
The short term Canadian dollar technicals remain negative. However, the loonie gained for several days in a row now en route to reversing the technical trend if it continues. For today, USD resistance is at 1.0220, 1.0274, and 1.0320. Support is at 1.0180, and 1.0110.
This morning, five central banks announced that existing swap lines to provide US dollars to other banks would have a lower cost, effectively reducing the cost of using this facility. This has allowed equities to rocket higher and the loonie followed. This announcement adds liquidity to the system, which is good for global markets. Easier money is good for equities. Eurozone officials also agreed to release the next batch of aid to Greece and also agreed to leverage the EFSF. Look for the loonie to continue to gain on this positive sentiment as those that are long USD may have to unravel further positions on this quick move. Markets are volatile and are moving quickly on bits of news. Look for eurozone headlines to continue to move markets and it seems like headlines are moving in the direction for a risk-on trade.
Today’s Range: 1.0120 – 1.0250
Daily Market | Knightsbridge Foreign Exchange
By Admin | December 2, 2011 | Daily Update |
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