Daily FX Commentary, November 22, 2011
Tuesday, November 22, 2011 at 3:09PM
By Warren Hayhoe,
Columnist, Canadian Money Magazine
Expected USD/CAD range: 1.0340-1.0420
Expected GBP/CAD range: 1.6175-1.6300
Expected EUR/CAD range: 1.3950-1.4100
Expected GBP/USD range: 1.5600-1.5750
Expected EUR/USD range: 1.3450-1.3575
Expected USD/JPY range: 76.50-77.50
Oil opened at $96.92 currently $97.84Gold opened at $ 1678.6.10, currently $1693.00
Morning Observations:
Another dismal European bond auction (this time from Spain) weighed on European equity markets and the Euro early this morning. Spain auctioned off €4bln in 3 month and 6 month bills at a recent record high of 5.11% and 5.22% respectively. Shortly after the auction however the ECB’s SMP (Securities Market Program) showed up to clean up the mess and bring down yields in the secondary market. The bid to cover ratio was almost double what it was in a month ago which really isn’t a surprise when you consider that this is the fourth time the ECB has come in after an auction and drove up prices. The reprieve in bond markets transferred to equities and then the Euro to a point where we are now back to pre-bond auction levels.
USDCAD had a calm 45pt trading session overnight, remaining between 1.0358-1.0401. Firmer commodity prices were offset by risk off US dollar bid for most of the Asian session. USDCAD was rejected at 1.0400 just after the 4:00am Spain auction but continues to be well bid in the 1.0360’s. Looking forward, we get Canadian retail sales figures today for the month of October and US GDP Q/Q GDP data at 8:30am. Expectations are for a 0.4% month over month gain in retail sales but considering some of the soft CA data recently we wouldn’t be surprised if it missed. South of the border US GDP is expected at 2.4% and there shouldn’t be any surprises here. Expecting a rather tight 1.0340-1.0420 range today and prefer selling the rallies short term with stops over 1.0450.
Thought of the Day
“One-fifth of the people are against everything all the time.”
Robert Kennedy
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