January 31, 2012
USD/CAD Open 0.9977-82 Overnight Range 0.9970-1.0030
|The Canadian dollar is ended the month on a positive note, trading well through parity with US dollar and poised for further gains. Optimism (misguided?) surrounding the EU summit and a new “fiscal compact” signed by 25 of 27 EU states combined with month end rebalancing flows has given both the loonie and the Euro a boost. Overnight, the AUD/USD climbed on better than expected NAB consumer confidence, ignoring the PM’s comments about a strong AUD$ hurting the local economy. Global equity indices are all higher as are NY equity futures. Oil is $100.18/bbl and gold is $1,738.18. Canadian GDP is expected to post a 2.3% gain, yoy. US data includes Chicago Purchasing Managers Survey, and Case Shiller Home prices.
The short term CAD$ technical’s are bullish looking for a test of USD support at 0.9880, following the break of support at both 1.0030 and 0.9980. For today, USD support is at 0.9970, .9940 and .9910. Resistance is at 1.0010, and 1.0040.
The Canadian dollar strength may prove fleeting and merely a factor of month end demand rather than a wholesale global stampede into risk seeking trades. Attributing the rally to progress being made on the Greek debt talks is a tad dubious especially considering that the deal is being negotiated by an interim Prime Minister who doesn’t have a mandate from the population.
And in other news, Herman Cain has declared that he is throwing his support behind Republican Presidential candidate Gingrich (not a Whig Newton) saying that Newt’s lack of ethics and multiple mistresses are qualities he admires.
Forecast Range of the Day 0.9950-1.0030