FX Morning Update October 11, 2011
USD/CAD Open: 1.0307-09 Overnight Range: 1.0257-1.0339
The Canadian dollar soared yesterday driven by news that a euro deal was underway to help eurozone banks recapitalize. However, a key parliamentary vote in Slovakia is taking place on allowing changes to eurozone’s rescue fund, which is causing some tension in markets. NY futures are pointing lower. Oil is at $84.80 and gold is at $1,663. Corporate earnings data and the FOMC minutes are released today.
The short term Canadian dollar technicals remain negative. For today, USD resistance is at 1.0373, 1.0450, 1.0510, 1.0575, and 1.0679. Support is at 1.0250, 1.0213, and 1.0131.
On Friday, strong Canadian and US jobs data had the loonie rallying, but the rally fizzled out at the end of the day on eurozone downgrades for Spain and Italy. However, yesterday, German and French leadership indicated a “package” is being put in place to aid the eurozone banking sectors, but details remain very thin. The focus is on trying to recapitalize banks and agreeing on national budget issues across the region. The positive news was sufficient to boost equity markets, oil prices, and the loonie. Despite the news, the lack of concrete details indicates that much divergence probably exists on who should pay for the recapitalization and exactly how national budget policies will be affected and regulated. Eurozone issues remain front and centre and one of the key drivers of market volatility of late. The loonie continues to follow moves in oil prices and equities. Expect this to continue while corporate earnings also directionally move sentiment and markets.
Today’s Range: 1.0225 – 1.0350
Daily Market | Knightsbridge Foreign Exchange
By Admin | October 12, 2011 | Daily Update | 0 comments