Forex Investment and Currency Trading

CAD
USDCAD had some wild moves over the last 24 hours, with a trading range of more than 200 points. After peaking above 1.08 just after noon yesterday, USDCAD started to nosedive all the way through to this morning as the USD sold off aggressively. In Canada there’s no top tier data today, with only wholesale trade and leading indicators on the data calendar, so Canadian markets will continue to focus on what’s happening in the U.S. The Bank of Canada’s Deputy Governor Murray delivers a speech tonight on the topic of “Measuring Inflation: Methodology and Misconceptions.” But with no Q&A and no media availability, it’s unlikely that the speech will contain anything market moving. If the Bank of Canada wants to deliver any important messages, they will likely come in Governor Carney’s speech on September 25th.

Majors
In the last 24 hours we’ve seen some huge currency moves, after the USD started selling off across the board yesterday afternoon. Overnight the world’s major central banks announced coordinated measures to address the lack of USD liquidity. The Federal Reserve has increased the size of its swap facilities with the ECB (from $50B to $110B) and the SNB (from $12B to $27B), and debuted new swap lines with the Bank of Japan ($60B), the Bank of England ($40B), and the Bank of Canada ($10B). While Treasurys sold off on the news, liquidity is clearly still an issue – 3-month and 12-month USD LIBOR rates continued to climb today, to 3.20% and 3.35%, respectively. Looking at the currency markets, as commodity prices have soared, NZD and AUD have outperformed the other majors, gaining a couple of cents each against the USD. EUR and GPB are also substantially stronger against the USD, with the Euro climbing above 1.45 earlier this morning for the first time since the very beginning of the month, and GBP currently sitting at around 1.8250, its highest level since the end of August. With no top-tier data out of the U.S. for the next several days, market will continue to focus on the health of the U.S. financial sector.