USDCAD tests 1.20 and falls to 1.1926 as oil pares losses

VBCE Daily Foreign Exchange Update for Tuesday, Jan. 13th, 2015

USDCAD spot rate: 1.1940 - 1.1945 (AS AT 9:00AM PST)

RANGES:	Asia:	1.1943	to	1.1978
	Europe:	1.1956	to	1.1993
	North America:	1.1926	to	1.1983

Technical Support / Resistance:

S2	S1	R1	R2
1.1671	1.1800	1.1984	1.2200

Key Economic Data Releases:

-U.S. IBD/TIPP economic optimism index: 51.5 (exp. 48.9)

-U.S. JOLTS job openings: 4.97 million (exp. 4.863 million)

Key Event Calendar:

DATE	CANADA	U.S.A.
Jan. 14		Retail sales, business inventories
Jan. 15		Initial jobless claims, producer price index
Jan. 16		CPI, industrial production, consumer sentiment

Yesterday, USDCAD traded from 1.1836 up to 1.1974 – a new 5.5 year high, breaking above Friday’s high of 1.1890. Oil prices dropped by nearly 5% yesterday and for USDCAD, there has been very little in the way of technical resistance between 1.1600 and the psychological level of 1.20. Overnight during the Asian session, the pairing eased to 1.1943 as the USD broadly weakened. Data out of China showed that exports grew faster than expected (9.9% vs. 6.8%) while imports declined less than expected (-2.3% vs. -7.4%). The trend reversed during the London session with USDCAD attempting a test of 1.20. The pairing briefly broke through 1.1984 resistance peaking at 1.1993 as oil touched $44.23. The move was short-lived with oil bouncing to $46.37 and USDCAD falling back to 1.1926. The pairing has since bounced to 1.1950. Currently, the TSX and the DJIA are up 0.18% and 1.10% respectively. EURCAD is down 0.70% trading between 1.4037 and 1.4190. GBPCAD is down 0.35% trading between 1.8069 and 1.8174. JPYCAD is down 0.15% trading between 0.01006 and 0.01016. Gold is up 0.40% trading between $1,231 and $1,244USD/oz, silver is up 3.80% trading between $16.57 and $17.20USD/oz, while oil is down 0.90%, trading between $44.23 and $46.37.

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

 

 

 

VBCE Daily Foreign Exchange Update for Tuesday, Dec. 23rd, 2014

USDCAD spot rate: 1.1620 - 1.1625 (AS AT 8:40AM PST)

RANGES:	Asia:	1.1610	to	1.1640
	Europe:	1.1616	to	1.1637
	North America:	1.1615	to	1.1667

Technical Support / Resistance:

S2	S1	R1	R2
1.1465	1.1567	1.1667	1.1700

Key Economic Data Releases:

-Canada GDP: 0.3% (exp. 0.1%)

-U.S. GDP (3RD quarter annualized): 5% (exp. 4.3%)

-U.S. durable goods orders: -0.7% (exp. 3.0%) ex transportation: -0.4% (exp. 1.0%)

-U.S. GDP price index: 1.4% (exp. 1.4%)

-U.S. housing price index: 0.6% (prev. 0.0%)

-U.S. new home sales: 0.438 million (exp. 0.472 million) % change: -1.6% (prev. 0.7%)

-U.S. consumer sentiment index: 93.6 (exp. 89.7)

-U.S. personal income: 0.4% (exp. 0.5%) personal spending: 0.6% (exp. 0.5%)

Key Event Calendar:

DATE	CANADA	U.S.A.
Dec. 24		Initial jobless claims
Dec. 25	Christmas Day	Christmas Day
Dec. 26	Boxing Day

Yesterday, USDCAD traded from 1.1579 up to 1.1646 before settling near 1.1630 for the balance of the session. The pairing dipped to 1.1610 overnight before moving up to 1.1630 ahead of the 5:30am Canadian and U.S. data releases. While the Canadian data was good, it was overshadowed by the strong U.S. 3RD quarter GDP sending USDCAD up to 1.1667 amidst broad-based USD strength. This technical level was tested for the 3RD time in the past week and the lack of follow-through has sent USDCAD back down to 1.1615/20. Currently, the TSX and the DJIA are up 1% and 0.45% respectively. EURCAD is down 0.40% trading between 1.4137 and 1.4237. GBPCAD is up 0.35% trading between 1.8090 and 1.8198. JPYCAD is unchanged trading between 0.00967 and 0.00972. Gold is down 0.79% trading between $1,185 and $1,203USD/oz, silver is down 0.20% trading between $15.64 and $16.16USD/oz, while oil is down 2.30%, trading between $55.49 and $58.50.

 

VBCE Daily Foreign Exchange Update for Monday, Dec. 22nd, 2014

USDCAD spot rate: 1.1630 - 1.1635 (AS AT 8:20AM PST)

RANGES:	Asia:	1.1579	to	1.1615
	Europe:	1.1600	to	1.1637
	North America:	1.1617	to	1.1646

Technical Support / Resistance:

S2	S1	R1	R2
1.1465	1.1567	1.1667	1.1700

Key Economic Data Releases:

-U.S. existing home sales: 4.93 million (exp. 5.25 million)

-U.S. existing homes sales % change: -6.1% (exp. 0.8%)

Key Event Calendar:

DATE	CANADA	U.S.A.
Dec. 23	GDP	Durable goods, GDP, consumer sentiment
Dec. 24		Initial jobless claims
Dec. 25	Christmas Day	Christmas Day
Dec. 26	Boxing Day

On Friday, USDCAD traded from 1.1567 up to 1.1633 before easing back to 1.1600. Canadian Inflation was softer than expected while retail sales were better than expected. Overnight, the pairing dipped to 1.1579 before climbing to session highs at 1.1646 this morning. In the absence of any key economic data, the CAD appears to be tracking oil which has fallen $3 from its overnight high of $58.50. Currently, the TSX is down 0.13% while the DJIA is up 0.43%. EURCAD is up 0.50% trading between 1.4163 and 1.4279. GBPCAD is up 0.35% trading between 1.8090 and 1.8198. JPYCAD is unchanged trading between 0.00967 and 0.00972. Gold is down 0.79% trading between $1,185 and $1,203USD/oz, silver is down 0.20% trading between $15.64 and $16.16USD/oz, while oil is down 2.30%, trading between $55.49 and $58.50.

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

 

VBCE Daily Foreign Exchange Update for Thursday, Dec. 18th, 2014

USDCAD spot rate: 1.1605 - 1.1610 (AS AT 8:52AM PST)

RANGES:	Asia:	1.1626	to	1.1648
	Europe:	1.1569	to	1.1647
	North America:	1.1582	to	1.1630

Technical Support / Resistance:

S2	S1	R1	R2
1.1465	1.1600	1.1667	1.1700

Key Economic Data Releases:

-U.S. Fed interest rate decision:

 http://www.federalreserve.gov/newsevents/press/monetary/20141217a.html

-U.S. initial jobless claims: 289k (exp. 295k)

-U.S. Markit Services PMI: 53.6 (exp. 56.9)

-U.S. leading indicators: 0.6 (exp. 0.5)

-U.S. Philadelphia Fed manufacturing survey: 24.5 (exp. 27.0)

Key Event Calendar:

DATE	CANADA	U.S.A.
Dec. 19	CPI, retail sales

Yesterday, USDCAD traded from 1.1623 up to 1.1672 before falling to 1.1560 after the 11:00am Fed announcement. The move lower was short-lived and USDCAD climbed back to hold near 1.1640 for the balance of the session. The Fed stated that “it can be patient in beginning to normalize the stance of monetary policy. The Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program.” This gave the markets confidence and the USD was the best performing currency after the Fed statement and both equity markets and oil gained on the news. Overnight, global markets followed suit with the Japanese Nikkei up 2.32% and the EURSTOXX50 up 3.33%. USDCAD dropped to 1.1569 as oil continued to climb. The pairing opened this morning at 1.1582 and climbed to 1.1630 as oil pared its gains. USDCAD has since fallen to 1.1600. Tomorrow, Canadian core inflation is expected to tick up from 2.3% to 2.4%y/y. Retail sales are expected to decline by 0.2% after having gained 0.8% previously.

Currently, the TSX and the DJIA are up 0.10% and 1.41% respectively. EURCAD is down 0.50% trading between 1.4236 and 1.4377. GBPCAD is up 0.40% trading between 1.8095 and 1.8202. JPYCAD is down 0.40% trading between 0.00973 and 0.00982. Gold is up 0.54% trading between $1,189 and $1,214USD/oz, silver is down 0.14% trading between $15.72 and $16.23USD/oz, while oil is down 1.19%, trading between $55.09 and $59.01.

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

 

VBCE Weekly Market FX Update - November 24-28 2014

November 24-28 2014

 

 

It was very quiet in the currency markets last week until Friday that is, when it received a double shot of adrenaline. The first shot was by ECB President, Mario Draghi, speaking at a banking conference in Frankfurt. Draghi strongly signaled that he and his colleagues were preparing a new round of powerful monetary stimulus to jolt the flagging Eurozone economy. Draghi said the ECB would “do what we must to raise inflation and inflation expectations as fast as possible.” If the bank’s current policies, which include some purchases of corporate bonds, do not end the threat, Mr. Draghi said, “we would step up the pressure and broaden even more the channels through which we intervene, by altering accordingly the size, pace and composition of our purchases.” This speech was reminiscent of a speech Mr. Draghi gave in July 2012, when he said the central bank “is ready to do whatever it takes to preserve the euro. In a nutshell, Draghi and the ECB are ready to rev up QE at its next meeting on December 4th.

The second shot of adrenaline came from an unlikely source, the Chinese central bank. It was as if all the central bankers were all in one room and the Chinese jumped up and down yelling it’s my turn, it’s my turn. Yes it is your turn, what kind of monetary Kool-Aid would you like to offer? And the Chinese decided to cut interest rates. This was the first cut in China’s benchmark interest rates in two and a half years, which must mean that things have really deteriorated in China. We say this because the Chinese have resisted cutting rates in the last couple of years in favour of reducing the required reserve ratio on banks. China’s move along with Draghi’s signal helped spur a rally in global equity markets, oil, gold, the USD, and the CAD.

 

The US dollar index was able to break above the downward sloping trend line and managed to rally to a four and half-year peak, which we have outlined on the monthly chart. As you can see from the long- term chart, the US dollar index is in a midst of a superb bull market with the path of least resistance continues to be higher. This bull market is showing no signs of slowing so buying the dibs will continue to be the best strategy until it’s not.

 

 

VBCE Daily Foreign Exchange Update for Wednesday, Dec. 3rd, 2014

USDCAD spot rate: 1.1350 - 1.1355 (AS AT 8:15AM PST)

RANGES:	Asia:	1.1390	to	1.1412
	Europe:	1.1374	to	1.1402
	North America:	1.1345	to	1.1418

 

Technical Support / Resistance:

S2	S1	R1	R2
1.1230	1.1315	1.1465	1.1549

Key Economic Data Releases:

-Bank of Canada interest rate decision: unchanged @ 1%
 http://www.bankofcanada.ca/2014/12/fad-press-release-2014-12-03/

-U.S. ADP employment change: 208,000 (exp. 221,000)

-U.S. non-farm productivity Q3: 2.3% (exp. 2.4%)

-U.S. Markit services PMI: 56.2 (prev. 57.1)

-U.S. ISM non-manufacturing index: 59.3 (exp. 57.5)

Key Event Calendar:

DATE	CANADA	U.S.A.
Dec. 4	Ivey PMI	Initial jobless claims
Dec. 5	Int’l merchandise trade, employment	Trade balance
	change, Unemployment rate	Non-farm payrolls, unemployment rate

After having fallen from 1.1459 down to 1.1314 Monday, USDCAD climbed back to 1.1424 before settling near 1.1394 for the balance of yesterday’s North American session. Overnight, USDCAD dipped to 1.1374 before climbing to 1.1418. The 7:00am Bank of Canada announcement was more hawkish than expected and the CAD is the best performing currency this morning. USDCAD has fallen to 1.1345 with bounces limited to 1.1360 thus far. The Bank noted higher than expected inflation levels and that exports are benefitting from a strengthening U.S. economy. Also, “Stronger exports are beginning to be reflected in increased business investment and employment.” The next major event risk comes Friday when job numbers are to be released. Canada is expected to add 5,000 jobs after having added 43,100 jobs prior. The U.S. is expected to add 232,000 after having added 214,000 jobs previously. The unemployment rate in Canada is expected to tick up to 6.6% from 6.5%. The U.S. unemployment rate is expected to remain steady at 5.8%. Currently, the TSX and the DJIA are up 0.88% and 0.11% respectively. EURCAD is down 1% trading between 1.3977 and 1.4136. GBPCAD is unchanged trading between 1.7792 and 1.7903. JPYCAD is down 0.75% trading between 0.00949 and 0.00957. Gold is up 1.3% trading between $1,194 and $1,215USD/oz, silver is up 0.54% trading between $16.23 and $16.58USD/oz, while oil is up 1.11%, trading between $66.91 and $68.19.

 

 

 

 

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.

Copyright © VBCE, All rights reserved.

---

For foreign currency exchange rates, visit www.vbce.ca/rates/major-currencies
For rates on precious metals, visit www.vbce.ca/rates/precious-metals
For questions, please contact us at info@vbce.ca  or 604-685-1008.
#120-800 West Pender Street, Vancouver, BC V6C 2V6