VBCE Daily Foreign Exchange Update for Thursday, Oct. 16th, 2014

USDCAD spot rate: 1.1280 - 1.1285 (AS AT 8:03AM PST)

RANGES:	Asia:	1.1241	to	1.1274
	Europe:	1.1266	to	1.1360
	North America:	1.1265	to	1.1345

Technical Support / Resistance:

S2	S1	R1	R2
1.1070	1.1227	1.1360	1.1439

Key Economic Data Releases:

-Canadian manufacturing shipments: -3.3% (exp. -1.6%)

-Canadian portfolio investment in foreign securities: $0.03 billion (prev. $9.67 billion)

-Foreign investment in Canadian securities: $10.28 billion (prev. $5.20 billion)

-U.S. initial jobless claims: 264k (exp. 290k)

-U.S. industrial production: 1% (exp. 0.4%)

-U.S. Philly Fed manufacturing survey: 20.7 (exp. 20)

Key Event Calendar:

DATE	CANADA	U.S.A.
Oct. 17	Consumer price index	Housing starts, building permits, consumer
		sentiment index

Yesterday, markets were extremely abnormal, one of the most volatile days in recent history. USDCAD whipsawed back and forth within a 160 basis point range. Event risk included poor retail sales and inflation data out of the U.S., and concerns about the Ebola virus while market risk included a notable decline and rebound in U.S. 10yr yields and a significant decline and rebound in North American equity markets (DJIA lost 460 pts before closing down just 173). USDCAD initially traded from 1.13 up to a 5 year high of 1.1385 before falling to 1.1226. This extreme move was followed by a bounce to 1.1329 and a decline to 1.1248. The volatility has continued this morning with USDCAD climbing to 1.1360 ahead of the North American open. The pairing dipped to 1.1320 ahead of U.S. data. Jobless claims and industrial production was better than expected and a brief climb to 1.1345 was followed by a decline to 1.1265. North American equity markets are erasing earlier losses and some indices are now in the green. After reaching a two year low of $79.78, oil has bounced back to $81.30. Tomorrow, Canadian inflation is expected to remain steady near 2% - 2.1%. Currently, the TSX is up 0.45% while the DJIA is down 0.40%. EURCAD is down 0.20% trading between 1.4392 and 1.4500. GBPCAD is up 0.20% trading between 1.7979 and 1.8170. JPYCAD is unchanged trading between 0.01061 and 0.01076. Gold is unchanged trading at $1,241USD/oz, silver down 0.34% trading at $17.41USD/oz, while oil is down 1.15%, trading at $80.84.

Sources: Reuters, Bloomberg, FXStreet, RBC Capital Markets, Bank of Canada, U.S. Federal Reserve, CNBC, Forexlive

Please contact the VBCE trading desk at 604-685-1016 for more information on our corporate foreign exchange and wire payment services. Updates by stevebrown@vbce.ca