June 7, 2012
|USD/CAD Open 1.0262-67 Overnight Range 1.0258-1.0294
The Canadian dollar drifted higher in Asia, sank in Europe and completely recovered its overnight losses in early North America trading in part due to news that China cut interest rates to stimulate its economy. The AUD/USD jumped on better than expected employment data aided and abetted by sharp improvement in risk sentiment. Yesterday, afternoon, the Fed’s Yellen hinted at a possibility of further stimulus ahead of Bernanke’s testimony today feeding a hunger for positive risk news. Global equity indices including NY futures are all higher. WTI oil is $84.03 and gold is at $1,681.01 US data on tap includes Jobless claims (forecast 378K) Canada has the Ivey PMI (forecast 54.5)
The short term USD/CAD technical’s have flipped to bearish on the break of support at both 1.0310 and 1.0270, setting up a re-test of the 200 day moving average, currently 1.0090. For today, USD support is at 1.0240, 1.0210 and 1.0160. Resistance is at 1.0270, 1.0290 and 1.0310.
The timing of the Chinese move to cut rates to stimulate their economy just as markets have concluded that Bernanke is poised to announce additional stimulus has given investors a renewed taste for risk and that is loonie positive.
And in other news, Toronto City council voted to ban plastic shopping bags from being given out or sold by retailers. Torontonians would be happier if they had voted to place plastic bags over their own heads, duct tape them securely and then take a vote an hour later.
Today’s Range 1.0210-1.0290