VBCE Daily Foreign Exchange Update for Wednesday, Nov. 5th, 2014

USDCAD spot rate: 1.1390 - 1.1395 (AS AT 8:50AM PST)

RANGES:	Asia:	1.1391	to	1.1429
	Europe:	1.1429	to	1.1466
	North America:	1.1384	to	1.1452

Technical Support / Resistance:

S2	S1	R1	R2
1.1296	1.1384	1.1466	1.1578

Key Economic Data Releases:

-U.S. ADP employment change: 230k (exp. 220k)

-U.S. Markit services PMI: 57.1 (prev. 58.9)

-U.S. ISM non-manufacturing index: 57.1 (exp. 58.0)

Key Event Calendar:

DATE	CANADA	U.S.A.
Nov. 6	Building permits, Ivey PMI	Initial jobless claims
Nov. 7	Net employment change,	Non-farm payrolls, unemployment rate
	unemployment rate	Participation rate

Yesterday, USDCAD traded from 1.1341 up to 1.1429 before falling back to 1.1390. The pairing regained the 1.1400 level in late North American trade. From a technical standpoint, the former 5 year high of 1.1384 now become the short-term support level. The recent CAD weakness can be attributed to dovish comments from the Bank of Canada, a 25% decline in oil prices over the past 5 months, and broad-based USD strength. Over the past two months the USD has been the best preforming currency. (Gaining the most vs. the JPY - more than 10% and gaining the least vs. the CAD ~ 3.5%) USDCAD climbed to 1.1466 overnight but has fallen to 1.1384 this morning. Oil prices have surged on smaller U.S. inventories (460,000 barrels vs. exp. 2.2 million barrels) and a report about a pipeline explosion in Saudi Arabia. Also, there is a report that Canadian 2ND quarter GDP has been revised higher from 3.1% to 3.6%. The main event risk comes Friday with Canadian and U.S. job stats. After adding 74,100 jobs prior, Canada is expected to show a 5,000 decline and the unemployment rate is expected to tick up from 6.8% to 6.9%. The U.S. is expected to add 231,000 jobs after adding 248,000 jobs in the previous month. The unemployment rate should hold steady at 5.9%. Currently, the TSX and the DJIA are up 1.21% and 0.20% respectively. EURCAD is down 0.60% trading between 1.4225 and 1.4335. GBPCAD is down 0.40% trading between 1.8167 and 1.8276. JPYCAD is down 1% trading between 0.00995 and 0.01005. Gold is down 2.2% trading between $1,138 and $1,169USD/oz, silver down 3.5% trading between $15.16 and $16.06USD/oz, while oil is up 3%, trading between $76.49 and $79.31.

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

Please contact the VBCE trading desk at 604-685-1008 for more information on our foreign exchange and wire payment services. Updates by stevebrown@vbce.ca

 

The information contained in this report has been compiled by our VBCE traders from sources believed to be reliable, but no representation or warranty, express or implied, is made by VBCE as to its accuracy, completeness or correctness.  All opinions and estimates contained in this report constitute VBCE’s judgment as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility.  Nothing in this report constitutes legal, accounting or tax advice or individually tailored investment advice.  This material is prepared for general circulation to clients and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it.  This report is not an offer to sell or a solicitation of an offer to buy any currency or precious metals.  Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.  To the full extent permitted by law neither VBCE nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein.  No matter contained in this document may be reproduced or copied by any means without the prior consent of VBCE
 

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