Loonieviews May 30, 2013

USD/CAD Open 1.0352-57 Overnight Range 1.0326-65

The Canadian dollar dipsy doodled in a lively but fairly narrow range overnight with FX markets rather choppy on the back of position adjustments due to concerns surrounding the end of quantitative easing in the US. Yesterday’s Bank of Canada statement was unchanged from the previous one setting the stage for the incoming BoC governor, Stephen Poloz to make his mark. Asian equity indices closed lower but the European equity indices are all higher as are US equity index futures. Gold is at $1,400.20 and WTI is $92.69. US data on tap today includes: GDP (forecast 2.5%), Jobless claims (forecast 340K) Personal Consumption Expenditures (forecast 0.9%, QoQ, Q1). Canada releases Current Account (forecast -15.5b), April IPP (forecast -0.3%, MoM)

The short term USD/CAD technicals are bullish while trading above 1.0330 looking for another break above 1.0380 to extend gains to 1.0420. A break of the 1.0420-40 area risks further US dollar gains to 1.0660. A move below 1.0330 suggests further US dollar weakness to 1.0260. For today, USD support is at 1.0330 and 1.0310 with Resistance at 1.0380, 1.0400 and 1.0420

And in other news, despite the Liberal government blowing $600 million to cancel power plants to save seats and destroying all email evidence of the decision, Andrea Howarth and the NDP, professing to giving Ontarians what they want, voted to support the Kathleen Wynn budget and by default keep the Liberals in power. This begs the question-Which political leader is really smoking crack?

Today’s Range 1.0330-1.0420

Michael O’Neill


Categories FX, Foreign Exchange, Currency, Canadian Dollar

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