USD/CAD Open: 0.9843-46 Overnight Range: 0.9840-0.9917
The Canadian dollar grinded slightly higher overnight. Over the weekend, Germany reiterated its resistance to Eurobonds basically mentioning that each eurozone nation should be responsible for its own debt situation. NY futures are pointing higher. Oil is higher at $83.76 and gold is higher at $1,875. Data to watch this week includes Canadian retail sales and US new home sales (Tuesday), US durable goods and oil supplies (Wednesday), US jobless claims and Global Economic Symposium Jackson Hole meeting commentary (Thursday), preliminary US GDP, US consumer sentiment and Bernanke speaking (Friday).
The short term Canadian dollar technicals remain negative. For the most part, the USD/CAD has traded between 0.9750 to 0.9950 over the last few weeks and between 0.9400 and 0.9999 this year. For today, USD resistance is at 0.9850, 0.9905, 0.9955, 0.9974, and 0.9999. Support is at 0.9806, 0.9775 and 0.9667.
US and Canadian bond yields are at record lows signaling the flight to safety and that many expect a US downturn. Canada has been resilient but many believe it’s inevitable to feel the impact as the US weakness trickles to Canada. However, BoC Governor Carney indicating he expects growth to pick up in the second half of the year, inspiring some confidence. Rumors that QEIII is going to be announced in due course is benefiting the loonie. Oil prices could ease as the situation in Libya gets resolved, which is a risk to the loonie. The market is focused on the direction for US and global economic growth and headlines from Europe as traders try to determine the path for the economy and if any stimulus measures will be implemented. With light data today, expect USD/CAD to move based on rumors of Bernanke’s expected speech at the end of the week.
Today’s Range: 0.9795 – 0.9895
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