Morning FX Commentary, March 19th, 2010
Friday, March 19, 2010 at 9:59AM USD/CAD 1.0080
GBP/CAD 1.5273
EUR/USD 1.3550
GBP/USD 1.5145
CAD/EUR 1.3656
JPY/CAD 0.011120
Oil opened at $82.20, currently $81.88
Gold opened at $1127.50, currently $1124.10CRB closed at 275.68, -0.62
Yesterday:
- US consumer price inflation little changed on lower energy costs, as it affirms the federal reserve’s stance that inflation will remain low as the economy recovers, rates to also remain low.
- US jobless claims dip slightly as the number of workers filing new application for unemployment benefits fell less than expected last week.
- Canadian government signals it probably won’t block the loonies’ move toward parity, playing down concerns.
Overnight:
- China to send envoy to Washington to try to cool trade disputes as its currency valuation comes under fire, saying threats from US legislators could hinder progress.
- German says it does not rule out IMF assistance for Greece, a government spokesman said, adding it is confident in Greece’s consolidation efforts will be successful.
- French President Sarkozy opposes IMF loan to Greece, adding to more tension between union members i.e. Germany, with regards to Greece sovereign debt crisis.
Today:
- Canadian CPI figures reported higher than expectation, adding support for a bullish push for the loonie. It is notable that BC was the only Canadian province to raise prices due to the Olympic games.
- Canadian retail sales rose above expectations. The ex-autos component had the biggest gain since November 2007 and was the sixth straight gain.
- Economists say that the US Fed may increase the discount rate charged on direct loans to banks before the next meeting of the FOMC on April 28.
Observations:
The Loonie slipped lower overnight on light data overseas and traded between 1.0150-1.0190 for most of the night. At 7:00am Stats. Can. released higher than expected inflation data which promptly shot the Loonie stronger to 1.01 on speculation that the Bank of Canada will be prompted to hike interest rates sooner and faster than expected. The US dollar was pushed even lower at 8:30 again this morning with better than expected Retail Sales from the US. This positive sentiment has helped commodities to gain back some of the lost ground overnight and gave equity markets a bit of a boost going into the weekend. It’s unlikely now that we’ll see that same volatility we did this morning and stick in our recent range of 1.0070-1.0130.
Thought of the Day
“You can't undo the past... but you can certainly not repeat it.” -- Bruce Willis





