USD/CAD Open 1.0176-81 Overnight Range 1.0163-1.0216
The Canadian dollar reversed losses yesterday and flirted with support in the 1.016070 area as FX traders continue to flip-flop positions, seeking direction, within fairly narrow ranges. Uncertainty surrounding the end of the US QE program continues to unsettle FX. There is not much in the way of data to guide FX markets today so expect more range trading. Gold is trading at $1,374.80 and WTI oil is $95.40. Asian eq1uity indices ended lower but European equity indices and NY equity index futures are all higher.
FX traders could soon be starring in their own Price Fixing Scandal. Bloomberg reports “Traders Said to Rig Currency Rates to Profit Off Clients”. (www.bloomberg.com ) The gist of the tale is that traders, knowing of a large “buy EUR/USD order, for example, at the WM Fix, would adjust their own positions ahead of time and perhaps even move the EUR/USD rate higher to sell the EUR to their client at a higher rate. What the story fails to address is the fact that a typical EUR/USD price may be good for $20 million. If a EUR/USD trader needs to buy $1 billion EUR’s, is he/she supposed to sit there and do nothing until WM posts the trade and then try to fill the order at the mid market posted rate by WM? Good luck breaking even with that strategy.
The short term USD/CAD technicals are bearish while trading below 1.0240 looking for a decisive break of 1.0170 to extend US dollar losses to 1.0080. For today, USD support is at 1.0170, 1.0140 and 1.0105. Resistance is at 1.0240, 1.0260 and 1.0280
And in other news, Dalton McGuinty, the former premier of Ontario resigned his seat yesterday. Reports stating that he quit to accept the Chairmanship of Liars Club International were denied.
Today’s Range 1.0140-1.0220