Daily FX Commentary,November 2, 2011
Wednesday, November 2, 2011 at 5:08PM
By Warren Hayhoe,
Columnist, Canadian Money Magazine
Expected USD/CAD range: 1.0075-1.0225
Expected GBP/CAD range: 1.6150-1.6275
Expected EUR/CAD range: 1.3850-1.4050
Expected GBP/USD range: 1.5950-1.6075
Expected EUR/USD range: 1.3700-1.4850
Expected USD/JPY range: 77.00-79.00
Oil opened at $92.19 currently $93.60Gold opened at $ 1711.80, currently $1735.45
Morning Observations:
Overnight global markets remained relatively calm ahead of the Fed here this afternoon. The saga of Greece is also on a temporary hold as Papandreou meets with Merkel, Sarkozy, Draghi (the new Trichet), and Legarde this morning ahead of yet another summit in Cannes. Like a schoolboy who is called to the principal’s office he will likely get a tongue lashing and then be forced to go sit in the corner. Eurozone yields came under an immense amount of pressure yesterday, particularly Italian bonds which reached a high of 6.25% in the 10yr before the ECB stepped in and started buying.
On to the larger event of the day, the FOMC statement at 12:30pm followed by their press conference at 2:15pm. As usual there will be no change to interest rates and the tone should remain relatively dovish. While a binge of good data has reduced the likelihood that helicopter Ben will restart quantitative easing it is suspected that he will lend a hand to the housing sector by announcing additional MBS purchases. In addition to that growth and inflation projections could be reduced given the recent slowdown in Europe and emerging markets. I have suspected that Bernanke will start the printing presses soon for some time now and even if it doesn’t happen today I still think it’s just around the corner. Don’t forget that preceding the FOMC decision today is the US ADP employment figures at 8:15am. Expected range in USDCAD: 1.0075-1.0225
Thought of the Day
“The idea is to die young as late as possible.”
Ashley Montagu
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