Daily FX Commentary, March 18, 2011
Friday, March 18, 2011 at 1:09PM
By Warren Hayhoe,
Columnist, Canadian Money Magazine
USD/CAD 0.9815
GBP/CAD 1.5850
EUR/USD 1.4125
GBP/USD 1.6150
EUR/CAD 1.3860
USD/JPY 81.45
Oil opened at $101.42, currently $102.52Gold opened at $1404.20, currently $1415.50
Morning Observations:
Coordinated FX intervention by Japan, France, Germany, Italy, England, and the ECB has the yen up over 6% from its lows 2 days ago. The Fed and the BoC are rumored to be doing the same this morning at 8:00am where they would be selling the JPY currency reserves versus their respective currency. It’s worth noting that most recent reports show the BoC having only about 250M CAD worth of JPY in their reserves (a very small figure in the grand scheme of things) so don’t expect too much action on the CADJPY front. The last time central banks made a coordinated effort to move a currency was in 2000 when they bought of the new and struggling euro. Historically FX intervention by a central bank has not been effective (ask the Swiss) but an effort by the entire G7 is considerably more convincing. In other new Canada’s inflation data was released this morning a little softer than most expectations. The USDCAD pair traded between 0.9808-0.9867 overnight, the 08 level held on Tuesday after the retracement from the 0.9974 high and has been tested again 3 times. A better risk appetite today should give way to a lower US dollar today especially after the dollar index closed under trend support yesterday. Expected range in USDCAD: 0.9785-0.9860
Thought of the Day
“I used to play sports. Then I realized you can buy trophies. Now I am good at everything.” -- Demetri Martin
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