Showing posts with label fx online. Show all posts
Showing posts with label fx online. Show all posts

Tuesday, January 20, 2015

VBCE Daily Foreign Exchange Update for Tuesday, Jan. 20th, 2015


USDCAD jumps from 1.1940 up to 1.2112 ahead of
tomorrow's Bank of Canada Announcement
 
 
USDCAD spot rate: 1.2075 - 1.2080 (AS AT 8:30AM PST)

RANGES:
Asia:
1.1940
to
1.1983
 
Europe:
1.1952
to
1.1993
 
North America:
1.1995
to
1.2112

Technical Support / Resistance:

S2
S1
R1
R2
1.1930
1.1984
1.2112
1.2200

Key Economic Data Releases:
-Canada manufacturing shipments: -1.4% (exp. -0.7%)

Key Event Calendar:

DATE
CANADA
U.S.A.
 
 
 
Jan. 21
Bank of Canada interest rate
Building permits, housing starts
Jan. 22
 
Jobless claims, housing price index
Jan. 23
CPI, retail sales
Markit mfg PMI, existing home sales

Yesterday, USDCAD traded from 1.1985 down to 1.1937, marking the 6TH consecutive day in which USDCAD failed to close above the key tech level of 1.1984. However, the inability to close below 1.1930 and generate a more sizeable correction opens the door for further CAD weakness. USDCAD reversed course last night during the Asian session climbing to 1.1983 despite better than expected China 4th quarter GDP data. The pairing broke above 1.20 this morning as Canadian manufacturing shipments were weaker than expected and oil dropped by as much a 3% today. USDCAD broke through last week’s high of 1.2045 and has made gains to 1.2112 before easing back to 1.2070. There is speculation that the Bank of Canada may offer a dovish tone in tomorrow’s monetary policy announcement with the recent plunge in oil affecting both Canada’s trade deficit and inflation forecast. Currently, the TSX is up 1.14% while the DJIA is unchanged. EURCAD is down 1.2% trading between 1.3755 and 1.3964. GBPCAD is down 0.35% trading between 1.8090 and 1.8279. JPYCAD is down 1.15% trading between 0.01017 and 0.01033. Gold is up 1% trading between $1,255 and $1,278USD/oz, silver is up 2.53% trading between $16.90 and $17.60USD/oz, while oil is up 2.55%, trading between $45.99 and $48.79.

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




Friday, January 16, 2015

USDCAD makes gains to 1.2045 before falling back to 1.1970


VBCE Daily Foreign Exchange Update for Friday, Jan. 16th, 2015

USDCAD spot rate: 1.1970 - 1.1975 (AS AT 8:00AM PST)

RANGES:
Asia:
1.1955
to
1.1984
 
Europe:
1.1961
to
1.1999
 
North America:
1.1966
to
1.2046

Technical Support / Resistance:

S2
S1
R1
R2
1.1733
1.1800
1.2046
1.2200

Key Economic Data Releases:

-U.S. consumer price index m/m: -0.4% (exp. -0.4%) y/y: 0.8% (exp. 0.7%)
-U.S. CPI ex food & energy m/m: 0.0% (exp. 0.1%) y/y: 1.6% (exp. 1.7%)
-U.S. industrial production: -0.1% (exp. 0.0%)
-U.S. consumer sentiment index: 98.2 (exp. 94.1)
- U.S. producer price index m/m: -0.3% (exp. -0.4%) y/y: 1.1% (exp. 1.0%)

Key Event Calendar:

DATE
CANADA
U.S.A.
 
 
 
Jan. 19
Net foreign securities transactions
Martin Luther King Day
Jan. 20
Manufacturing shipments
 
Jan. 21
Bank of Canada interest rate
Building permits, housing starts
Jan. 22
 
Jobless claims, housing price index
Jan. 23
CPI, retail sales
Markit mfg PMI, existing home sales

Yesterday, USDCAD traded from 1.1940 up to 1.1994 before falling to 1.1803. Oil continued its 3rd day of gains reaching $51.44 in the immediate after-math of the Swiss National Bank announcement. Markets were taken by surprise when the SNB removed its 3 year old cap of 1.20 for EURCHF. In one of the most volatile days on record, oil dropped back to $46 within hours of reaching $51.44 and USDCAD quickly bounced back above 1.1900 reaching 1.1970 in late North American trade. The pairing broke above 1.20 this morning making gains to 1.2046 before falling back to 1.2005. A 2ND attempt higher stalled at 1.2030 as oil made gains to $48 and USDCAD dropped back to 1.1970. The worst performing currency is the EURO for the 2ND straight day with EURUSD reaching an 11 year low. Currently, the TSX is up 1.14% while the DJIA is unchanged. EURCAD is down 1.2% trading between 1.3755 and 1.3964. GBPCAD is down 0.35% trading between 1.8090 and 1.8279. JPYCAD is down 1.15% trading between 0.01017 and 0.01033. Gold is up 1% trading between $1,255 and $1,278USD/oz, silver is up 2.53% trading between $16.90 and $17.60USD/oz, while oil is up 2.55%, trading between $45.99 and $48.79.

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

 


Wednesday, January 14, 2015

Streak over for AC/DC?



AC/DC is back and we’re thrilled!  
 
Using AC/DC as a leading indicator, we could see big trouble ahead for the global economy - or maybe not.

1973: AC/DC form in Sydney, Australia - Economy: Start of the oil crisis, which saw the price quadruple

1980: AC/DC release breakthrough album Back In Black - Economy: Inflation in UK reaches 20% and unemployment nears 2 million

1990: AC/DC score comeback with The Razor's Edge - Economy: Recession in UK imminent

2008: AC/DC top UK album charts - Economy: Biggest world recession in decades looms

December 2014: AC/DC release their new album, Rock of Bust - Economy: ???



Shifting Expectations

The dominate themes in last week’s trading were the continued drop in the price of crude oil, the angst in the U.S. equity markets ahead of Q4 earnings season, and the disappointing U.S. December jobs report. This caused investors looking for yield to move from the negative and low yielding currencies to the high yielders of the NZD and AUD. The yen moved higher as the carry trade unwound due as nervous equity traders looked to peel back from equity positions. Meanwhile the USD benefited from the weakness in CAD due to lower crude prices; GBP due to evidence of slower growth; CHF due to efforts by the Swiss central bank to maintain the EUR/CHF 1.20 peg; and euro due to more signals that the ECB’s balance sheet will return to 2012 levels.


In last week’s ‘Weekly FX Update’ we stated the following: the dominant support behind the rise in the USD continues to be the “divergence theme” – a U.S. economy growing at a 4% clip and a central bank ready to deliver an interest rate hike by mid-year, while additional stimulus is required in the rest of the world. The USD turned in a mixed performance last week because the market’s collective expectation on the timing of the Fed’s first interest rate hike near mid-year has been put into question. The CME Group FedWatch tool shows a 52% chance of a September rate hike which is down from the 57% chance it showed on Thursday, the day before the jobs report was released.
http://video.cnbc.com/gallery/?video=3000344746

On the surface, the headline jobs number looked good as over 252K jobs were created in the month of December, more than the market’s 240K forecast. In addition, the previous two months were also revised up by 50K. The unemployment rate fell from 5.8% to 5.6%, the lowest level since June 2008. Unfortunately, the 252K jobs was the weakest monthly jobs growth since August and more importantly the data on wages was a major disappointment. Average hourly earnings dropped 0.2%, which was not only the first decline in more than 2 years but also the largest drop ever. The year-over-year rate slumped to 1.7% and if this continues it will become a major obstacle for the Fed.



One report does not make a trend so we will have to wait and see how this plays out. The jobs report was enough to trigger profit taking on long USD positions. The news flow in the week ahead will probably reinforce the rethink about the king dollar thesis and spur a consolidative move in the USD. U.S. consumer inflation, producer prices, retail sales, and the Beige Book report are on the docket this week. With deflation being a dominate theme worldwide we suspect that the U.S. economy is not immune to it so we do expect consumer and producer prices reports to reflect weaker prices in the December reports. Also worth considering are four speeches to be given by Fed speakers this week. Lockhart and Kocherlakota are noted doves, Bullard is a centrist, and Plosser is a hawk.

Historical Effects of Falling Oil Prices

On a year-over-year basis, the price of oil has dropped over 35% a total of 7 times in the past 30 years. Out of those 7 times, a recession followed the steep decline in prices a total of 3 times. However, each time there was a recession following a dramatic drop in oil prices (September 1991, October 2001 and October 2008) the U.S. economy was already in a recession or it was imminent.


The impact of oil prices on the U.S. energy sector is obvious and the market has already marked the sector down by 25% by the end of Q4 2014. The manufacturing sector, however, should accelerate heading into 2015 as output should intensify resulting from cheaper manufacturing costs. With the energy sector factored in, overall capital spending should also increase. The major risk to the U.S. economy and growth is inflation. The Fed is obviously watching signs of inflation to determine when to raise interest rates. Once the price of oil stabilizes and consumers realize savings on heating and transportation, the result should demonstrate an increase in spending and, therefore, rising demand. The fall in oil prices should add approximately $75 billion a year to spend on other goods for American consumers, which is about 0.7% of total U.S. consumption.



How far do you think oil will drop?
Share your thoughts with us in the comment section below.
 
 

Tuesday, January 13, 2015

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

 
 
 

Monday, January 12, 2015

USDCAD breaks above 1.1900 / posts new 5.5 year high

 
 
VBCE Daily Foreign Exchange Update for Monday, Jan. 12th, 2015
USDCAD spot rate: 1.1923 - 1.1928 (AS AT 8:07AM PST)

RANGES:
Asia:
1.1836
to
1.1865
 
Europe:
1.1840
to
1.1886
 
North America:
1.1878
to
1.1938

Technical Support / Resistance:

S2
S1
R1
R2
1.1671
1.1800
1.1984
1.2200

Key Economic Data Releases:
-U.S. labour market conditions index: 6.1 (prev. 5.5)

Key Event Calendar:

DATE
CANADA
U.S.A.
 
 
 
Jan. 13
 
 
Jan. 14
 
Retail sales, business inventories
Jan. 15
 
Initial jobless claims, producer price index
Jan. 16
 
CPI, industrial production, consumer sentiment

On Friday, USDCAD traded from 1.1805 up to 1.1890 before easing to close the week at 1.1866. The USD and the CAD were the worst preforming currencies on Friday. Although the U.S. added more jobs than expected including a large revision to November’s data, many of the jobs were of the lower paying / part-time quality. On the other hand, Canada added 53,300 full time jobs while losing 57,700 part time jobs. Overnight during the Asian session, USDCAD eased lower to 1.1836 on broad-based USD weakness. The pairing reversed course testing Friday’s post-employment data high during the London session. With oil losing nearly another 5% today, USDCAD has broken above 1.1900 and has made gains to 1.1940, its highest level in 5.5 years. Currently, the TSX and the DJIA are down 1.34% and 0.25% respectively. EURCAD is up 0.35% trading between 1.4004 and 1.4116. GBPCAD is up 0.50% trading between 1.7925 and 1.8080. JPYCAD is up 0.45% trading between 0.00996 and 0.01007. Gold is up 1% trading between $1,217 and $1,231USD/oz, silver is up 0.71% trading between $16.43 and $16.68USD/oz, while oil is down nearly 5%, trading between $45.93 and $48.24.
Sources: Reuters, Bloomberg, FXStreet, RBC Capital Markets, Bank of Canada, U.S. Federal Reserve, CNBC, Forexlive