LoonieViews June 5, 2012

June 5, 2012
USD/CAD Open 1.0400-05 Overnight Range 1.0363-1.0407

The Canadian dollar was fairly quiet overnight but still traded with a negative bias. The AUD/USD was sold following a quarter point cut in the overnight rate to 0.75%, by the RBA. The RBA cited “deterioration in Financial Markets” and “uncertainty in Europe” as rationale. This sentiment will likely be echoed by the Bank of Canada today, but they will leave Canadian rates unchanged. The USD/JPY is locked in a narrow band with intervention fears offsetting safe haven demand flows. The Spanish Budget minister set the cat among the pigeons with a call for EU funds to help local banks. This remark coupled with more soft data from China and the Eurozone, kept risk aversion in the forefront. Asian equity indices ended positive, European indices are mixed and NY equity futures are flat to slightly down. WTI oil is $83.89 and gold is $1,618.30

The short term USD/CAD technicals are pretty much unchanged from yesterday-bullish USD above 1.0345. For today, USD support is at 1.0360, 1.0340 and 1.0310. Resistance is at 1.0420 and 1.0450.

Today’s bank of Canada rate decision will see interest rates left unchanged. The accompanying statement will likely be viewed as dovish and mirror the RBA statement.

Today’s Range 1.0360-1.0420

In other news, a Dutch artist got over his grief after his cat was killed by a car, by having it stuffed and turned into a remote controlled helicopter. Even Stephen King, author of Pet Cemetery, thought it was creepy. Harry Chapin is now singing “ …Cat’s in the Copter and the silver spoon…

Michael O’Neill


Categories Markets

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