March 9, 2012
USD/CAD Open 0.9920-25 Overnight Range 0.9895-0.9935
|The Canadian dollar traded as quietly as the rest of the majors awaiting the release of both the Canadian and US employment reports. The headline Canadian number disappointed. The net change in employment was a loss of 2.8k jobs vs. forecast for a gain of 15k. However the sting was eased by a drop of .2% in the Unemployment rate, from 7.6% to 7.4%. Australia released more weak data, this time a worse than expected Trade report. The trade balance fell to -673 mio vs. expectations of a rise to 1.5 bio. The Eur/USD retreated slightly in a buy the rumour sell the fact move, following news of the successful Greek debt swap, which garnered 95% participation. In addition to the US employment report (forecast +225K), we get the US Trade Balance (forecast -49.08 billion. Asian equity indices were higher, European equity indices were flat to down and NY equity futures are flat. WTI Oil is $106.88/bbl and gold is $1,700.73 per oz.
The short term USD/CAD technical’s are mixed. The USD/CAD rate is churning within a tight 0.9890-0.9940 band and needs to break either side to provide direction. Above 0.9940 would argue for a quick pop to 0.9980 and possibly 1.0040. Below 0.9980 suggests 0.9850 and then 0.9810. Meanwhile, the USD/CAD downtrend from mid-November remains intact.
The successful Greek debt swap may provide temporary relief to the Euro Zone but the lack of a sustained EUR/USD rally on the news suggests that the outcome was priced in. The focus will shift to the US and the prospect that the US economy is expanding while Europe is still exposed to further credit events and a recession. That will be good news for the loonie.
And in other news, Washington as put the Vatican on the state departments list of money laundering centers in the recently released 2012 International Narcotics Control Strategy Report. A Vatican official was heard to ask "What next-Will Americans start burning bibles?.
Today’s Forecasted Range 0.9880-0.9980