December 10, 2012
USD/CAD 0.9871-76 Overnight Range: 0.9865-0.9888
The USD/CAD rate squeaked out some gains in the early Asian session buoyed by Friday night’s announcement that the Canadian government had approved the foreign takeovers by CNOOC and Malaysia’s Petronas. The loonie was already in demand following the break of the 0.9880-90 support zone. Softer than expected Chinese trade data took the shine off the AUD/USD. Italy will be looking for its 64 or 65th government since World War ll due to Prime Minister Monti’s resignation. The news capped EUR/USD as Monti is seen to be favoring austerity measures to improve Italy’s budget woes. Asian equity indices rose while European equity indices and NY equity futures indexes are all lower to start the week. Gold is at $1,715.04 and WTI oil is $86.63
The short term USD/CAD technicals are bearish while trading below the 0.9880-90 support zone. However, on both the hourly and daily charts, the USD/CAD rate is merely testing the bottom of the gently downward sloping channel. The current boundaries are 0.9860 and 0.9935
The Canadian dollar could grind out further gains due to additional CAD$ demand to close the mega mergers approved on Friday as his is the last real week of trading for 2012. Starting next Monday, those who can will be either taking off for Christmas holidays or making plans to take off.
This week’s FOMC meeting should be a non-event as markets await the resolution of the fiscal cliff drama.
And in other news, if you think your morning coffee tastes like sh*t, you may be more right than you ever wanted to be. If your morning “cuppa Joe” cost $50 per cup and you bought it in Thailand or Abu Dhabi, then you could be swilling a brew from beans plucked from elephant poo. Of course, if you are the type of person to actually pay $50 bucks for a cup of coffee, you deserve it.
Today’s Range 0.9840-0.9890
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Vice President, FX Trading