USDCAD extends above 1.2600 as U.S. Fed maintains status quo

VBCE Daily Foreign Exchange Update for Thursday, Jan. 29th, 2015

USDCAD spot rate: 1.2605 - 1.2610 (AS AT 8:11AM PST)

RANGES:	Asia:	1.2512	to	1.2541
	Europe:	1.2514	to	1.2562
	North America:	1.2529	to	1.2613

Technical Support / Resistance:

S2	S1	R1	R2
1.2380	1.2503	1.2713	1.3063

Key Economic Data Releases:

-U.S. Fed interest rate decision: http://www.federalreserve.gov/newsevents/press/monetary/20150128a.htm
-U.S. initial jobless claims: 265k (exp. 300k)

-U.S. pending home sales: -3.7% (exp. 0.5%) y/y: 6.1% prev. 4.1%)

Key Event Calendar:

DATE	CANADA	U.S.A.
Jan. 30	GDP	GDP, consumer sentiment index

Yesterday, USDCAD traded from 1.2390 up to 1.2537, effectively erasing Tuesday’s move from 1.2502 down to 1.2380. The pairing was holding near 1.2455 when the 11:00am U.S. Fed announcement was made. A brief dip to 1.2430 was short-lived and followed by a move up to 1.2537. The Fed announcement was not as dovish as the market had anticipated given recent central bank activity in Japan, Europe, and Canada. Equity markets plunged as the Fed continues with its upbeat assessment of the U.S. economy and wait-and-see attitude towards interest rate “lift off”. Overnight, USDCAD eased marginally to 1.2512 before climbing to 1.2562. A pull-back this morning to 1.2529 has been followed by a surge to 1.2640 as oil falls below $44. Tomorrow, Canadian GDP is expected to be unchanged after a 0.3% rise previously. U.S. 4TH quarter GDP is expected to be 3.3% on an annualized basis, down from 5.0%. Currently, the TSX and the DJIA are down 0.84% and 0.26% respectively. EURCAD is up 1% trading between 1.4113 and 1.4282. GBPCAD is up 0.15% trading between 1.8933 and 1.9013. JPYCAD is unchanged trading between 0.01061 and 0.01067. Gold is down 1.40% trading between $1,263 and $1,286USD/oz, silver is down 4% trading between $17.11 and $18.03USD/oz, while oil is down 1%, trading between $43.71 and $44.94.

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