USD/CAD 1.0320
GBP/CAD 1.6123
EUR/USD 1.3080
GBP/USD 1.5623
CAD/EUR 1.3496
JPY/CAD 84.21
Oil opened at $76.99, currently $77.14
Gold opened at $1160.40, currently $1164.40
CRB closed at 266.16, +1.70
Morning Observations:
Stocks continue their slow monotonous climb overnight after investors shrugged off lower than expected durable goods orders in the States yesterday. New Zealand raised their cash rate by ¼% overnight for the second time in a number of weeks. This lifts their benchmark rate 0.5% over their record lows of 2.5%. Although, like Canada and Australia, it will be difficult to raise interest rates much higher if the G4 economies continue to struggle.
The USD/CAD exchange rate fluctuated between 1.0303-1.0392 overnight and was helped lower by notable US dollar selling versus the major crosses. The euro is making fresh multi-month highs; it is currently trading next to the 1.3092 high, and should target 1.3125 before losing some steam. Today, unemployment claims from the States will dominate the headlines. It is no secret that the States has struggled manufacturing jobs, a poor reading wouldn’t surprise too many people and should keep us in our recent ranges. Expected range in USD/CAD today: 1.0300-1.0395.
Thought of the Day
“A cynic is a man who knows the price of everything but the value of nothing.” -- Oscar Wilde
]]>USD/CAD 1.0315
GBP/CAD 1.6056
EUR/USD 1.2994
GBP/USD 1.5574
CAD/EUR 1.3397
JPY/CAD 85.12
Oil opened at $77.50, currently $77.38
Gold opened at $1158.00, currently $1162.40
CRB closed at 264.46, -2.20
Morning Observations:
Yesterday morning markets got off to a great start; however were unable to add to the enthusiasm despite multiple attempts throughout the day. The Loonie ranged between 1.0256 (posted early morning) and in one of a couple sell offs mid-afternoon reached 1.0392.
Notable moves in the currency landscape this morning include a stronger Pound Sterling. This is being chalked up to firmer economic readings from the U.K. recently and a bid by a Canadian consortium to buy Tomkins Plc for 2.9 billion pounds (GBP/CAD high of 1.6176). Elsewhere the Aussie dollar was knocked lower, despite plenty of risk appetite, due to a low inflation reading out of that region last night (AUD/USD is 1% off its two-month high). The Royal Bank of Australia has already indicated that the will ease off their rate hiking cycle and this only make the decision easier.
Equity sentiment is mixed this morning and we will await US Core Durable Goods Orders data at 8:30. Crude oil looks like it has found a short-term bottom around $77/brl and with inventories expected low today at 10:30 we very likely could see another rally. Risk looks like it will play today, marching the Loonie higher, range in USD/CAD 1.0240-1.0340
Thought of the Day
“Behind every successful man lurks a truly amazed ex-mother-in-law.” -- John Chrusciel
USD/CAD 1.0260
GBP/CAD 1.5944
EUR/USD 1.3027
GBP/USD 1.5538
CAD/EUR 1.3376
JPY/CAD 85.10
Oil opened at $78.98, currently $74.46
Gold opened at $1183.10, currently $1184.20
CRB closed at 266.66, +0.04
Morning Observations:
The US dollar is broadly weaker again this morning as markets overnight continued their upbeat sentiment from yesterday. The Dollar is breaking through some significant support levels this morning against many of its major trading partners. Against our Loonie 1.0280 represents the strongest point in the latter half of July. Versus the Euro; 1.3030 marked the strongest euro in over two and a half months, although there are rumors of official selling interest (Swiss National Bank) around these levels. Finally and most notably; cable is touching 5 month highs and getting ever so close to moving above the 200 DMA set currently at 1.5556.
Datawise today there is nothing from Canada and from the US Consumer Confidence and a Manufacturing Index number, are both out at 10:00am. Markets look like they will hold their bid tone through the open however poor data readings could turn things around. Expecting USD/CAD to sell down to 1.0240 range before mid-morning and some profit taking to later in the afternoon to take us back up to 1.0300. Range today in USD/CAD: 1.0240-1.0320
Thought of the Day
“If you break 100, watch your golf. If you break 80, watch your business.” -- Joey Adams
]]>USD/CAD 1.0358
GBP/CAD 1.6050
EUR/USD 1.2927
GBP/USD 1.5500
CAD/EUR 1.3387
JPY/CAD 83.86
Oil opened at $78.98, currently $78.38
Gold opened at $1187.80, currently $1187.10
CRB closed at 266.62, -0.24
Morning Observations:
We are officially into the thick of summer (at least that’s what the red pigment inflaming my face is telling me). Apparently I’m not the only one enjoying some time off either as markets are getting off to a slow start, the USD/CAD exchange rate fluctuating only half a cent since Friday afternoon. Global equity markets have had little to react to and all are little changed from their respective open. New home sales out of the States is the only scheduled data piece out today and forecasts are moderately higher than the month previous (317k versus 300k). Commodity markets are generally lower as well this morning, crude is off about $1.00 from its highs of $79.57.
In Currencyland the notable mover in the past 24 hours has been the Euro as it reacted to the stress test results released Friday. Seven of ninety-one banks failed the test (the market was looking for 9 or 10) resulting in a stronger Euro this morning. Going forward today don’t expect too much volatility and FX valuations will likely be driven by risk appetite. The EUR/USD pair is in striking distance of its 1.3029 high that it reached July 20th this could very well drive our Loonie to new highs today if markets don’t sell off today. Initial support will come in around 1.0320 and 1.0275, expected range in USD/CAD: 1.0320-1.0390.
Thought of the Day
“Man approaches the unattainable truth through a succession of errors.” -- Aldous Huxley
]]>USD/CAD 1.0382
GBP/CAD 1.6004
EUR/USD 1.2898
GBP/USD 1.5417
CAD/EUR 1.3387
JPY/CAD 84.23
Oil opened at $78.16, currently $78.73
Gold opened at $1195.60, currently $1201.50
CRB closed at 266.86 261.53 5.33
Morning Observations:
Canadian retail sales and the release of the Bank of Canada’s monetary policy report underpinned the Loonie yesterday, as an increase in spending on discretionary goods and a slightly more hawkish tone in the monetary report were seen as positive for our currency. Overnight, more positive news from Europe and better than expected U.K. GDP pushed already surging equity markets higher. Commodities are also benefitting from an upbeat market sentiment, and with weather concerns in the Gulf of Mexico crude oil touched $79.50 this a.m.
Today is all about stress tests, as 90 bankers have been running on a treadmill now for weeks, and this afternoon we will see how fast their hearts are actually beating. The stability of Europe’s financial industry will ultimately determine the regions ability to pull out of their sovereign debt problems and return to financial stability.
Turning to today our inflation reading indicated a contraction in prices by 0.1% month over month. The Loonie dropped along with the probability of a rate hike in September. Today the currencies will take their directions from market sentiment, and who isn’t optimistic on a rainy Friday. Expected range today in USD/CAD: 1.0320-1.0420
Thought of the Day
“We don't see things as they are, we see them as we are.” -- Anais Nin
USD/CAD 1.0417
GBP/CAD 1.5881
EUR/USD 1.2852
GBP/USD 1.5248
CAD/EUR 1.3387
JPY/CAD 83.30
Oil opened at $76.56, currently $76.88
Gold opened at $1191.80, currently $1187.50
CRB closed at 261.53, +0.01
Morning Observations:
Mr. Bernanke moved equity markets lower yesterday afternoon and the US dollar higher with his testimony in front of the Senate Banking Committee. The general lack of optimism in the Q&A session didn’t help anyone’s spirits and things sold off right up until the closing bell. Europe was the saving grace overnight as manufacturing data out of that region beat expectations, which has lifted market sentiment to pre-Bernanke testimony levels.
This leaves us at similar levels to yesterday afternoon, awaiting Canadian retail sales numbers and the Bank of Canada’s Monetary Policy Report after that. Last month’s reading was surprisingly low, making a subsequent month over month increase that much easier. Another strong fundamental number from Canada would increase the likelihood of another rate hike in September and push the Loonie to its highs of yesterday morning. Expected range in USD/CAD today: 1.0350-1.0450
Thought of the Day
“Tough times never last, but tough people do.” -- Robert H. Schuller
USD/CAD 1.0368
GBP/CAD 1.5831
EUR/USD 1.2818
GBP/USD 1.5271
CAD/EUR 1.3288
JPY/CAD 83.94
Oil opened at $77.58, currently $78.20
Gold opened at $1191.70, currently $1194.90
CRB closed at 261.52, +0.32
Morning Observations:
Surprise, surprise! Yesterday, the Bank of Canada hiked interest rates as largely expected, bringing the overnight lending rate to 0.75%. The sentiment in the statement released was rather dovish and reiterated the June phrase “considerable uncertainty” in reference to the global economic climate. The Loonie proceeded to drop half a cent after the statement and topped out at 1.0587 before being swept up in overall positive market sentiment as the day wore on. Crude took off from $76.00/brl at 10.00am, and hasn’t looked back since, currently trading at its high of $78.20.
Today the focus will be on Fed Chairman Ben Bernanke’s testimony in Washington DC at 2:00pm. The initial statement and the Q&A session afterwards will be combed over for any indications of the direction of future monetary policy, - this time around more importantly than others because of the recent dichotomy between US yields and equity markets (something has got to give). Prosperous earning seasons are lifting equity markets at the same time that US treasury yields are dropping. Unless my economics professors were lying to me, eventually one of the two will have to reverse.
The low in USD/CAD overnight was 1.0351. I don’t suspect we go much lower but if we do USD/CAD should find initial support around 1.0320-1.0330. The Euro has backed off against the major crosses as the results of the bank’s stress tests are released. Any further reservations of that persuasion will take the US dollar higher. Expected range in USD/CAD: 1.0350-1.0450.
Thought of the Day
“Hesitation increases in relation to risk in equal proportion to age.” -- Ernest Hemingway
]]>USD/CAD 1.0550
GBP/CAD 1.6004
EUR/USD 1.2865
GBP/USD 1.5166
CAD/EUR 1.3577
JPY/CAD 82.35
Oil opened at $76.54, currently $76.16
Gold opened at $1181.90, currently $1177.20
CRB closed at 261.20, -1.02
Morning Observations:
Black is back! I’m of course referring to the corporate balance sheets on both sides of the boarder. Bank of NY Mellon the most recent institution to release Q2 earnings which reflected triple the earnings from the same period a year earlier. Market sentiment however is not swayed and some recent concerns over the state of the US housing market are instilling some reservations in investors’ minds this morning. US Building Permits are due out of the US at 8:30 this morning.
The main event today will understandably be the Bank of Canada’s rate decision at 9:00am this morning. It’s a near certainty that our central bank will hike overnight lending rates by a quarter percentage point to 0.75%. More importantly, will be the rhetoric from their statement and whether further rate hikes are implied. Historically speaking, the Bank of Canada rarely moves interest rates much more than a percent away from the Federal Reserve. Now with rates likely on hold in the US for the foreseeable future it has dampened the probability of rate hikes here in Canada past September. All this is to say that a dovish tone from the BoC today would not be a surprise. The direction of our currency this morning will largely depend what we see this morning from the Bank of Canada, however my bias remains to the topside and a test of 1.0600.
Thought of the Day
“Life is really simple, but we insist on making it complicated.” -- Confucius
]]>USD/CAD 1.0535
GBP/CAD 1.6101
EUR/USD 1.2955
GBP/USD 1.5271
CAD/EUR 1.3659
JPY/CAD 82.55
Oil opened at $76.01, currently $76.05
Gold opened at $1188.20, currently $1187.00
CRB closed at 262.22, -1.99
Morning Observations:
The US dollar climbed as high as 1.0581 late on Friday due to late selling of most North American equities. However; with a very red Friday out of our minds we are greeted with an optimistic outlook of the world this morning (a silver lining Monday I suppose). The Eurozone is trading higher this morning and North American stocks are set to do the same. The Euro is holding its ground; despite a ratings downgrade in Ireland. The multi-nation currency presses higher and has appreciated to a 1.3008 peak on Friday. The Euro and most risk based currencies are better this morning while the US dollar, Yen, and Hungarian Forint are the notable losers. Commodities are generally higher and our Loonie has moved up in anticipation of out ¼ point rate hike tomorrow morning. There is no tangible economic data today so currencies will take their direction from risk sentiment. The US dollar looks like it has room to go higher and notwithstanding a bull run in equity markets I expect USD/CAD to move back up to weekend highs and test 1.0600.
Thought of the Day
“Knowledge is true opinion.” -- Plato
]]>USD/CAD 1.0435
GBP/CAD 1.6027
EUR/USD 1.2992
GBP/USD 1.5358
CAD/EUR 1.3556
JPY/CAD 83.09
Oil opened at $76.62, currently $76.72
Gold opened at $1208.30, currently $1205.10
CRB closed at 264.21, +2.01
Morning Observations:
In our own FX Open the Yen, Euro, and US dollar represent Louis Oosthuizen, Tiger Woods, and John Daly. Our precious Loonie is anything but, and along with the kiwi dollar are the David Duval’s or Jim Furyk’s of the field. The currency landscape was driven by equities yesterday and when they sold off all morning despite great earnings reported by JP a general risk aversion mentality set in. Once again we’re greeted by better than expected earnings this morning; this time from GE and BofA, and the market once again shrug’s them off. The USD/CAD traded as high as 1.0467 overnight and any signs of continued risk aversion or a retracement in the soaring euro could quickly put us over 1.0500. Out of the US of A this morning is CPI, TICS, and Prelim UoM Consumer Sentiment. I’m a pessimist until the weekend comes; expected range in USD/CAD 1.0400-1.0520.
Thought of the Day
“Ideas shape the course of history.” -- John Maynard Keynes
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