Thursday, January 15, 2015

USDCAD Volatility Sparked by Swiss National Bank Surprise Announcement

 
VBCE Daily Foreign Exchange Update for Thursday, Jan. 15th, 2015
 


USDCAD spot rate: 1.1925 - 1.1930 (AS AT 8:55AM PST)

RANGES:
Asia:
1.1940
to
1.1975
 
Europe:
1.1950
to
1.1994
 
North America:
1.1803
to
1.1950

Technical Support / Resistance:

S2
S1
R1
R2
1.1733
1.1800
1.1984
1.2200

Key Economic Data Releases:

-U.S. initial jobless claims: 316k (exp. 291k)
-U.S. NY Empire State manufacturing index: 9.95 (exp. 5.0)
-U.S. Philadelphia Fed manufacturing survey: 6.3 (exp. 19.9)
-U.S. producer price index m/m: -0.3% (exp. -0.4%) y/y: 1.1% (exp. 1.0%)
-U.S. PPI ex food and energy m/m: 0.3% (exp. 0.1%) y/y: 2.1% (exp. 1.9%)

Key Event Calendar:

DATE
CANADA
U.S.A.
 
 
 
Jan. 16
 
CPI, industrial production, consumer sentiment
 
 
 

Yesterday, USDCAD traded from 1.1948 up to 1.2017 before falling to 1.1927. The pairing made an attempt higher mid-morning but failed to sustain a break of 1.20 for the 3rd time and fell back to 1.1940. Oil continued its 2nd day of gains reaching $49 while markets moved into positive territory. During the Asian session, the AUD outperformed as Australia added 37,400 jobs (41,600 were full time) vs. exp. 3,800. Despite firm oil prices, USDCAD pushed higher reaching 1.1994 in early European trade. The Swiss National Bank shocked markets by removing its 3 year old cap of 1.20 for EURCHF. Despite also announcing a negative deposit rate of 0.75%, the CHF surged across the board. CHFCAD climbed from 1.1710 up to 1.4753 before falling back to 1.3250. The extreme volatility saw oil make gains to $51.44 – a 17% gain over the past 3 days. Combined with the failed 4TH attempt to break 1.20, USDCAD plunged to 1.1803. The move was short-lived with the pairing bouncing back to 1.1950. It’s since been confined to a 1.1910/40 range. Currently, the TSX is unchanged while the DJIA is down 0.33%. EURCAD is down 2% trading between 1.3787 and 1.4106. GBPCAD is down 1% trading between 1.80 and 1.8250. JPYCAD is unchanged trading between 0.01014 and 0.01027. Gold is up 2.40% trading between $1,226 and $1,266USD/oz, silver is up 1% trading between $16.70 and $17.23USD/oz, while oil is down 2%, trading between $46.95 and $51.44.

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

 


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