August 17, 2012
|USD/CAD Open 0.9873-78 Overnight Range 0.9864-0.9881
The Canadian dollar traded sideways overnight supported in part by rising oil prices (WTI $95.08/bbl) and CAD$ demand against AUD, JPY and GBP. The AUD/USD came under early pressure when officials warned that the RBA could ease rates (currently 3.5%) if currency appreciation hurts the economy. The EUR/USD got a boost when Germany’s Merkel belatedly supported the ECB president, Mario Draghi’s plan to buy bonds. Still, it is still summer markets and ahead of the weekend, so traders don’t want to stray far from home. Asian equity indices closed higher, European equity indices are also in the green, but NY equity indice futures are slightly lower. Canadian CPI is released at 8:30. The forecast is July 0.2%, MoM, 1.5% YoY, Core CPI July 0.2%, Core 2.0%) US data includes University of Michigan Confidence (forecast 72.2)
The short term USD/CAD technicals are bearish USD. The USD dropped through solid support in the 0.9880 level opening up a straight shot to 0.9800. For today, USD support is at 0.9960, 0.9940 and 0.9800. Resistance is at 0.9880. 0.9900 and 0.9920
The Canadian dollar is continuing its slow grind higher, buoyed by the mix of rising oil and commodity prices , and improving US economic growth outlook and the 15.2 billion pound gorilla in the room, the CNOOC all cash bid for Nexxen. The jury is still out on approval of this deal. One camp believes that the Canadian government gave a nudge-nudge, wink, wink nod of approval to Chinese officials prior to the announcement. The other camp holds that Canada won’t approve the deal because China doesn’t provide the same reciprocity for Chinese companies.
And in other news, Sir Paul McCartney, a doddering old stoner and ex-Beatle has weighed in to support Russia’s Pussy Riot, convicted for an anti-Kremlin protest. The aged and semi-fried ex-Beatle reportedly muttered that “Maybe I’m Amazed” that the Band is not On The Run. Let them Live or Let Die.
Today’s Range 0.9840-80