FX Morning Update October 12, 2011
USD/CAD Open: 1.0171-74 Overnight Range: 1.0154-1.0329
The Canadian dollar soared in overnight trading following positive European markets. Overnight, eurozone industrial production data gained unexpectedly and Trichet indicated Greece should be able to avoid a default boosting sentiment. NY futures are pointing higher. Oil is higher at $86.16 and gold is at $1,687. Today, FED minutes are released.
The short term Canadian dollar technicals remain negative while above parity. For today, USD resistance is at 1.0213, 1.0250, 1.0373, and 1.0450. Support is at 1.0131, 1.0057, and 1.0005.
Despite Slovakia voting no to the expansion of the EFSF bailout fund, Germany will find a way to put pressure on the country to change course, and eurozone policymakers are pressing ahead with a way to recapitalize European banks. China continued to proactively invest in its large banks. China Petrochemical’s ~C$2bn acquisition of Daylight Energy is also benefiting the loonie. Alcoa earnings disappointed but the company outlook remained bullish. The market is largely risk-on today, driven by news that details will be released on a comprehensive package to recapitalize eurozone banks and this seems to be the number one driver of the risk-on risk-off trade. Equities are higher as are oil prices and, as a result, the loonie has benefited and stop losses have exacerbated the move towards the loonie. CAD bears are hoping any details released of a euro bank recapitalization are murky, which could cause a quick USD rally, while CAD bulls are focused on hearing policymakers indicate Greece will be bailed-out as will the banks, allowing the risk-on trade to continue.
Today’s Range: 1.0010 – 1.0250
Daily Market | Knightsbridge Foreign Exchange
By Admin | October 12, 2011 | Daily Update |
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