March 28, 2012
|USD/CAD Open 0.9997-1.0002 Overnight Range 0.9975-1.0005
The Canadian dollar sank below parity to the US dollar overnight, slew-footed by another shift into risk aversion trading. Recent strong upticks in equities, renewed concerns over a slowing Chinese economy and another warning from Fitch that “Greece could need another bail-out” sparked profit taking and a demand for US dollars. Oil prices dropped on a proposal for Europe and the US to reduce strategic reserves, yet oil companies continue to gouge consumers at the pumps. Global equity indices including NY equity futures are lower. WTI Oil is at $104.96 and gold is $1,657.10. US data releases today include final 4Qtr GDP and jobless claims (forecast 350K)) Canada releases IPP and at 4pm, a new federal budget.
The short term USD/CAD technicals are bullish while trading above 0.9975 targeting 1.0050 on the day. In addition, a move above the 100 day moving average (1.0006) risks further USD/CAD gains to 1.0102 (200 day moving average) For today, USD support is at 0.9975 and 0.9940. Resistance is at 1.0010, 1.0030 and 1.0050.
A new Canadian budget will be tabled in parliament today. It is an annual exercise whereby the ruling power attempts to demonstrate fiscal responsibility by cutting back expenditures they first trumpeted, while trying to get elected.
In other news, the Supreme Court of Canada has apparently decided that brothels are legal in Canada. The learned judges apparently concluded that the House of Commons is already a brothel, as the members have been screwing taxpayers since 1867 and getting paid for it.
Today’s Range 0.9975-1.0050