USD/CAD Open: 0.9763-67 Overnight Range: 0.9758-0.9836
The Canadian dollar continued to gain over the weekend. On Friday, Bernanke indicated that the Fed is ready to support a weak economy but didn’t announce anything material and expects the US economy to rebound in the latter half of the year. Also, US GDP growth was revised downward to 1% from 1.3%. Overnight, China increased its reserve ratio requirements for banks but it didn’t impact the loonie. NY futures are pointing higher. Oil is at $86.23 and gold is at $1,822. The US releases home sales and personal income and expenditure data today. Later this week, Canada release current account data and the US releases the FED’s committee minutes and consumer confidence (Tuesday), Canadian GDP data along with US ADP payroll data and manufacturing activity (Wednesday), and US weekly jobless claims (Thursday), and US jobs data (Friday).
The short term Canadian dollar technicals remain negative. The USD/CAD dipped below the 200 day moving average overnight and it will be interesting to see if this level will hold. For today, USD resistance is at 0.9797, 0.9850, and 0.9905. Support is at 0.9700, 0.9667, 0.9615, and 0.9530.
Bernanke’s comments on policy makers needing to jumpstart the economy boosted expectations of further stimulus and sent equities higher. The market is see-sawing based on expectations on further stimulus to boost consumer demand and equities. The market will now be focused on upcoming payroll and manufacturing data, and positive data could turn-on the risk-on trade, while strong negative data could see the USD/CAD back near the 0.9900 level.
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