Daily FX Commentary, September 7, 2010
Tuesday, September 7, 2010 at 10:12AM
By Warren Hayhoe,
Columnist, Canadian Money Magazine
USD/CAD 1.0425
GBP/CAD 1.5971
EUR/USD 1.2743
GBP/USD 1.5322
CAD/EUR 1.3282
JPY/CAD 80.38
Oil opened at $74.60, currently $73.29
Gold opened at $1249.80, currently $1247.40
CRB closed at 272.77, +1.62
Morning Observations:
The Euro and the Aussie dollar look like Edward Norton after a run in with Tyler Durden in Fight Club - beat up. The multi-nation currency sold off versus 14 of 16 major currencies as new concerns were brought to light regarding their bank’s stress tests results, while the Australian dollar was sent lower by some rather dovish comments from their central bank after leaving rates on hold at 3.5%. On the other side of the safe haven trade , currencies like the Yen, Franc, and U.S. dollar are benefitting from the mayhem. Global markets are almost unanimously lower 1-2% this morning, and the question now becomes whether or not Mr. Carney has already decided what he is doing tomorrow from a rate perspective. The street’s expectation currently sits at a 65% probability of a rate hike and that probability is up by 15% from the middle of last week. Regardless, the price action in USDCAD today will be ultra sensitive to market sentiment with the interest rate decision hanging in the balance. Markets look hesitant to shrug off the negative sentiment this morning but have at least leveled off. Dow futures are only off 47bps currently and looks like they could climb back into the positive in no time with a little bit of incentive. Expected range in the USDCAD today is 1.0350-1.0450
Thought of the Day
“Not admitting a mistake is a bigger mistake.” -- Robert Half
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