FX Morning Update October 17, 2011
USD/CAD Open: 1.0101-04 Overnight Range: 1.0045-1.0117
The Canadian dollar traded sideways in overnight trading. The loonie continued to rally on Friday as risk-on appetite was driven by encouraging US retail sales data and positive momentum regarding eurozone developments. Overnight, however, Germany indicated there would be no quick fix to the eurozone issues dampening some sentiment. Oil is at $86.91 and gold is at $1,687. NY futures are flat. US corporate earnings continue to be released and will be watched closely today along with Empire Mfg Index and Capacity Utilization data in the US. This week in Canada, international securities purchases and BOC business outlook survey (Monday), leading index and wholesale sales (Wednesday), and Inflation (Friday) are the key data points to be released in Canada.
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 1.0057 and 1.0005.
There was no significant news from the G20 meeting this weekend in Paris. The Canadian dollar continued to soar last week as momentum has gathered that eurozone policy makers will find a way to recapitalize banks and restore confidence that contagion can be avoided. The eurozone issue seems to be the single biggest driver driving global sentiment and the rise in the loonie. Oil prices are near $90 from the high $70’s just a short while ago and equity markets have gained last week as well. US corporate earnings, if they meet expectations, will be a catalyst for a rise in the loonie, while big misses, could cause a flock back to the USD. If risk sentiment continues to fall (VIX), look for the loonie to continue its rise targeting parity.
Today’s Range: 1.0045 – 1.0175
Daily Market | Knightsbridge Foreign Exchange
By Admin | October 17, 2011 | Daily Update |
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