LoonieViews Augsut 20, 2012

August 17, 2012
USD/CAD Open 0.9878-83 Overnight Range 0.9876-0.9895

The Canadian dollar basically flat-lined in another uninspiring overnight session. The loonie shrugged off Friday’s weaker than expected Canadian CPI release as traders realized that the data would have zero effect on domestic interest rates. The thin summer markets have players grasping at straws to discern a direction. Overnight, it was a report in Der Speigel suggesting that the ECB would cap sovereign bond yields a notion dispelled by the Bundesbank. Not surprisingly earlier USD losses were quickly recovered. WTI Oil is $95.89 and gold is $1,615.30 Global equity indices were flat to mostly positive and NY equity indice futures are also flat. There is no data of note from the US or Canada today

The short term USD/CAD technicals are bearish USD. The USD is consolidating recent losses in a narrow 0.9960-95 band with a bias for further weakness. For today, USD support is at 0.9860 and 0.9840. Resistance is at 0.9900 and 0.9920.

There is a distinct lack of meaningful economic releases from both Canada and the US this week which should ensure another round of directionless, lack luster trading, leaving positions vulnerable to headlines about sovereign debt plan resolutions.

And in other news, Gu Kailai ,the wife of one of China’s political stars, pled guilty to the murder of a British businessman. She was given a suspended death sentence. It’s China, so does that mean she will be hanged instead of being shot?

Today’s Range 0.9860-0.9900

Michael O’Neill


Categories FX, Foreign Exchange, Currency, Canadian Dollar

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