USD/CAD Open: 0.9895-99 Overnight Range: 0.9865-0.9925
The Canadian dollar was smacked around and lost ground over the long weekend as issues in Europe crept up along with poor jobs data on Friday in the US. The swiss franc tumbled overnight as the Swiss National Bank decided to put a floor on the exchange rate (euro/swiss). NY futures are pointing sharply lower. Oil is at $84.04 and gold is at $1,895. Today, US ISM data is released. This week in Canada, the BoC rate decision and Ivey PMI (Wednesday), building permits and trade balance and Obama’s jobs speech (Thursday), and employment data and housing starts (Friday) are events to watch.
The short term Canadian dollar technicals remain negative targeting parity while the longer term Canadian technicals remain bullish for the time being. The USD/CAD has had trouble breaking through parity and met strong resistance near this level as USD sellers have come in to the market. For today, USD resistance is at 0.9905, 0.9930, 0.9950, 0.9975, and 1.0009. Support is at 0.9850, 0.9797, and 0.9747.
Negative sentiment has gripped markets starting with the very weak US jobs data (zero jobs!) that was released on Friday and last month’s data was revised also lower coupled with eurozone issues that have gained headlines as Germans don’t want to further fund bailouts and rumors of fractures between Greece and the IMF on austerity measures. Insurance for Italian debt continues to climb to a record as well. The market is eagerly putting its hand out asking the FED and Obama to find a way to prop up equity markets and put more money to work, which would cause a selloff in the USD and a rise in the Canadian dollar, however, others believe stimulus won’t work and the economy is headed towards a recession and have moved to treasuries and gold and the USD. The loonie will continue to be under pressure targeting parity as long as economic data continues to disappoint and while a stimulus plan has not been outlined. Helicopter Ben has called a two-day meeting instead of one-day for his next FOMC meeting later this month, which leads many to believe he is planning to rally his helicopter mates to sprinkle more money in to the market (QEIII). Look for continued uncertainty and volatility in the markets driven by eurozone bank and debt issues and worries about a recession to drive markets. Obama’s jobs speech could be a big one, but without republican support, the markets may not attribute much value to it.
Today’s Range: 0.9880 – 0.9980