Forex Investment and Currency Trading

USD/CAD just doesn’t seem to want to head higher; after a much weaker than expected retail sales report yesterday morning funds initially shot sharply higher, but were met with selling interest above 1.07, and couldn’t manage to stick up there for long. The overnight session was very quiet, and we remained in a tight 1.0665/1.0695 range for a large majority of the Asian session and London morning.
We’ve seen all sorts of Bank of Canada news over the last 24 hours. Yesterday afternoon the BoC announced that “Reflecting the improved conditions in funding markets, as evidenced by lower market-based funding costs [...]

[Read more →]

So, after the dust has settled from this week’s focus on BoC policy, we are left with an overnight rate that the central bank has pre-committed to keep at 0.25% until the middle of next year (providing inflation behaves) and a framework for additional policy measures should they be needed. The read between the lines though is that the central bank perhaps doesn’t think these additional credit and quantitative easing (CE/QE) initiatives will be needed, if its latest growth estimates are on the money. The CAD was under a fair amount of pressure running into this week’s BoC policy announcement [...]

[Read more →]

Throughout October USD/CAD was essentially a one-way bet with the pair trading higher all the way from 1.05 levels to 1.30. Two key themes pushed the USD/CAD inexorably higher: rising global risk aversion (and as a consequence, a flight to quality and a bid for the USD) and a continued plunge in commodity prices. Equities have acted as a good proxy for the global risk sentiment theme with the S&P 500 index down 17% in October. Meanwhile, concerns over a
slowing global economy - and likely recession - in 2009 continues to have a material impact on the commodity price outlook. [...]

[Read more →]

CAD continues to drive lower, testing support at 0.9820/25 (May 21st low), after the surprising Current Account Balance release this morning.  Canada continues to befuddle our economists and traders but trend is definitely clear.  The next target level below 0.9820 will be 0.9715, the February 28th low. 
The interesting thing to note is that most of the country’s key economic figures, outside of labor, have all disappointed (building permits, motor sales, manufacturing shipments, retail sales).  It seems like businesses continue to hire despite the fact they are not building or exporting anything besides oil…to add insult to injury, those employed are [...]

[Read more →]