FX Morning Update October 7, 2011
The Canadian dollar was volatile in overnight trading in advance of today’s Canadian and US jobs data. Yesterday, positive sentiment from the ECB boosted market sentiment. Today, Canada added 60.9k jobs, much higher than consensus of 15k, as the unemployment rate decreased to 7.1%. In the US, non-farm payroll jobs came in at 103k vs. 59k consensus also beating expectations. NY futures are pointing higher. Oil is at $82.27 and gold is at $1,656.
The short term Canadian dollar technicals remain negative. For today, USD resistance is at 1.0450, 1.0510, 1.0575, 1.0679, 1.0750, and 1.0850. Support is at 1.0373, 1.0250, 1.0213, and 1.0131.
The Canadian dollar bulls are feeling good and back on the saddle as positive US and Canadian jobs data have reinforced the risk-on trade and suggested the jobs situation is getting better, despite continuous negative headlines of the economic situation possibly deteriorating. Strong Canadian jobs data also provides the Bank of Canada a reason to not reduce rates. A strong US jobs data report today, also boosted the loonie, as what’s good for the US is good for Canada. CAD bears are looking for signs that eurozone policymakers will disagree on bailout’s for Greece and eurozone banks and that although jobs data today was positive, negative economic data will continue to flow. CAD bulls argue the economy will muddle through this softpatch and things are not as bad as the headlines would make one believe and eurozone policymakers will come up with a TARP like program to support the European banks from any contagion. Look for markets to become quiet in the afternoon ahead of the long weekend.
Today’s Range: 1.0225 – 1.0350
Daily Market | Knightsbridge Foreign Exchange
By Admin | October 10, 2011 | Daily Update | 0 comments