Daily FX Commentary, November 14, 2011
Monday, November 14, 2011 at 6:07PM
By Warren Hayhoe,
Columnist, Canadian Money Magazine
Expected USD/CAD range: 1.0100-1.0200
Expected GBP/CAD range: 1.6150-1.6300
Expected EUR/CAD range: 1.3800-1.4000
Expected GBP/USD range: 1.5900-1.6050
Expected EUR/USD range: 1.3550-1.3750
Expected USD/JPY range: 76.50-78.00
Oil opened at $98.99 currently $98.20Gold opened at $ 1788.10, currently $1781.00
Morning Observations:
Italy passed austerity measures on Friday and Berlusconi kept his word and resigned shortly after. The euro rallied nearly 200 points from the open and USDCAD plumbed lows under 1.0100. Global stock markets rallied and crude prices nearly broke $100/brl. BUT… It all came crashing down when an Italian bond auction had a poor showing and the ECB had to once again step in to soak up the debris. The Italians managed to get 3bln euros in for 5 years at a rate of 6.29% (the highest they have had to pay since 1997). The demand was relatively healthy as the auction carried a bid to cover ration or 1.47. Going forward, while most headlines are still focused on Greece and Italy they’ll likely have to move over to make room for the Spaniards as their yields are edging dangerously higher (see chart below). The euro sold on the Italian bond auction results while the US dollar and Japanese yen gained. The Canadian dollar was supported just ahead of October’s 1.0077 low and was sent right back to the recent 1.01-1.02 range. USDCAD has closed in the 1.01’s all but one day in October and looks to consolidate further with a lack of any concrete resolution in Europe. Today should have more of the same and with a lack of any significant data releases a range of 1.0100-1.0200 should easily cover us today.
Thought of the Day
“I became insane, with long intervals of horrible sanity.”
Edgar Allen Poe
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