October 25, 2012
USD/CAD 0.9913-17 Overnight Range: 0.9903-0.9945
The Canadian dollar stayed within the recent range overnight tracking movements in EUR/USD. Not surprisingly, the FOMC stuck to its stimulus plan which led to a softer dollar. Overnight, it was another tepid drift into risk seeking backed by mere comments (not data)from China’s Ministry of Industry saying that the country’s factory output should grow faster in the last quarter. BoJ easing anticipation helped to keep USD/JPY bid. Stronger than expected UK GDP data, attributed to the Olympics gave sterling a boost before markets settled in to wait for US data, which includes; Jobless claims (forecast 370k), Durable Goods (7.1% MoM’ Core 0.8% MoM) and Pending Home sales (2.1% MoM. Global equity indices including NY equity indice futures are all up. WTI oil is 486.47 and gold is $1,717.20
The short term USD/CAD technicals are still mixed. USD bears believe that USD is bearish while trading below 0.9940 but needing a break of support at 0.9880 to extend the downtrend. USD bulls see the failure to break below 0.9880 as evidence the USD uptrend and look to buy around 0.9890 for a test of the 200 day moving average at 0.9972. For today, USD support is at 0.9910 and 0.9880. Resistance is at 0.9940 and 0.9970
And in other news, the former soc Gen trader, Jerome Kerviel, whose trading acumen garnered a $6.3 billion loss, failed in his bid to reverse his guilty verdict.. He is going to appeal this ruling as well. In addition, he still has to repay the loss. Hopefully French prisons have a higher per diem then Canadian prisons.
Today’s Range 0.9870-0.9940
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Vice President, FX Trading