| Technical Ranges
CAD, USD, EUR, GBP & JPY
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USD/CAD
Support: 0.9733
Resistance: 0.9830
CAD/JPY
Support: 82.07
Resistance: 83.15
EUR/CAD
Support: 1.3736 Resistance: 1.3840
EUR/USD
Support: 1.4056 Resistance: 1.4186
GBP/USD
Support: 1.6114 Resistance: 1.6211
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Currency Commentary
EUR, USD, CAD, GBP , JPY
EUR: The Euro retreat from 1.4250 has been contained at 1.4050 week low ahead of the European session opening, and with equity markets slightly positive, the pair bounced up through the session regaining 1.4100 to reach day highs at 1.4130.
USD: Durable goods alittle weaker today, yet jobless claims came out positive. The USD/CAD had been in the higher 0.9700 lvl...where it currently remains at the time of this report. Tomorrow's GDP and Michigan Confidence numbers will cause alittle more movement on this pair.
Overall, the Portugal and Spain situation continues in Europe...Japan's nuclear situation lingers...and the Middle East and Africa will be the main theme for the next few weeks. The USD/CAD continues to be in a bearish trend...as I stated yesterday....eventually this trend will end...
CAD: A different picture for equity markets today...up on a high...oil slightly down...yet metals performing well. The USD/CAD needs to break below 0.9650 to head further south..so far..it is not able to break the higher 0.9700 lvls. We may see a bullish trend setting up in the next few weeks.
Today's orders from clients are sell @ 0.9800 or mid-levels...for our buyers orders are simliar to yesterday for higher 0.9700 levels...
Today's range ..
possible mid 0.9700 to mid 0.9800
GBP: The Pound's retreat from 14-month high at 1.6340, extended about 80 pips lower after the release of weaker than expected UK retail sales figures, to break below 1.6200 posting a fresh one-week low at 1.6150.
JPY: Asian markets have gone through gains, in most cases, with the exception of Japan, where risk appetite remains subdued by the consequences of the accident in Fukushima nuclear plant, as contamination extended through the Tokyo area.
Japanese Nikkei Index eased 0.1% while the Hong Kong Hang Seng Index rose 0.8%, the South Korean Kospi Index advanced 1.2% wn. and the Australian ASX index advanced 1.0% up. The Chinese Shangai Composite Index remained flat, with markets in Taiwan India and Singapore, higher.
Asian traders have followed the trail of Wall Street, which closed Wednesday's session with gains despite rising tensions on the Middle East and with Eurozone debt issues back on the table after Portuguese parliament refused the fourth austerity plan, forcing the resignation of the socialist president.
USD/JPY remains trading flat around 81.00 for the fourth consecutive day, with support at 80.70 area and upside attempts limited below 81.30.
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" Will the B.O.C. raise rates later this year?? "....
" roughly the past 20 years, the B.O.C. has generally avoided starting a tightening campaign in an election ".....
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The Bank of Canada is almost certain to wait until the latter half of this year to raise interest rates, now that an election is in the offing.
Many economists were already predicting that rate hikes would be on hold until the summer and the spectre of a federal campaign is now cementing that view. History shows that the central bank is usually reluctant to increase rates during an election, due to uncertainty about the direction of the government’s economic policies and the possibility that the move could be seen as partisan.
The Bank of Canada did raise rates in December, 2005, and it lowered them in October, 2008, each time during an election campaign. But in the first instance, it was one more move in a tightening push that began in 2004; in the second, in was during the midst of a global financial meltdown.
While the central bank’s board is appointed by the minister of finance, and ultimately responsible to Ottawa, the bank maintains its independence. Nevertheless, Canadian central bankers generally shy away from media interviews and press conferences during elections and stick to prewritten speeches so as not to inadvertently wade into a political campaign.
The Bank of Canada tends to signal its moves ahead of time – so economists expect that consumers and corporate borrowers have at least a few months to prepare for the next rate hike.
Canadian Imperial Bank of Commerce chief economist Avery Shenfeld had previously thought that the next hike would take place in May, but he now believes it will happen in July. Much of his rationale is based on the notion that the central bank “may be reluctant to use the April meeting to signal a May hike, given that April will come in the middle of an election.”
Economists at Scotia Capital said that the looming election has created new uncertainty about the fiscal policy environment in the near term, and reinforced their view that rate increases won’t occur before October.
“It is less clear whether fiscal policy will act as a drag on growth if election goodies are dangled about,” they said in an e-mail to clients Wednesday morning. “Second, over roughly the past 20 years, the Bank of Canada has generally avoided starting a tightening campaign in an election.”
A number of experts caution that the central bank would certainly take action, election or no election, if it felt it was necessary to do so.
“They are fully flexible and independent of what’s going on in the government,” said Charles St-Arnaud, a foreign exchange research analyst at Nomura Securities in New York.
Although it’s highly unlikely, “if they feel there’s a really big need to increase, they will still go,” he said. A rare example might be a geopolitical risk that shocks the Canadian dollar and prompts the Bank of Canada to raise rates to restore value.
While the central bank prefers not to take action during an election, it would certainly do so if it felt that it was necessary, said Toronto-Dominion Bank chief economist Craig Alexander, who is sticking to his prediction that the Bank won’t move before July. “The economic numbers we are getting are solid, but aren’t sending a signal that inflation is going to be a problem,” he said.
Indeed, Scotia Capital economist Derek Holt said the retail sales figures that came out this week illustrate that “the Canadian consumer is tapped-out.”
" USD- Initial jobless claims decline, durable goods fell in February "..
" The labor market recovery is on track " ...
Fewer Americans filed applications for unemployment benefits last week, signaling the labor market is mending.
Jobless claims declined by 5,000 to 382,000 in the week ended March 19, Labor Department figures showed today in Washington, in line with the median forecast of economists surveyed by Bloomberg News. The total number of people receiving benefits dropped to the lowest level in almost three years.
Waning firings and a pickup in hiring are helping to ensure gains in consumer spending, which accounts for about 70 percent of the economy. The report is consistent with Federal Reserve policy makers’ assessment that the economic recovery is on a firmer footing, even as they said the unemployment rate remains “elevated.”
“The labor market recovery is on track,” said David Semmens, a U.S. economist at Standard Chartered Bank in New York. “The unemployment rate will see a slow-but-steady grind down.”
Orders for long-lasting goods unexpectedly fell in February, reflecting declines in demand for capital goods and military aircraft, a report from the Commerce Department also showed today. Bookings for goods meant to last at least three years dropped 0.9 percent after a 3.6 percent gain the prior month that was larger than initially reported.
Companies may be tempering their purchases of new equipment until further signs emerge that the recovery is broadening out and will generate faster job growth. Even so, rising exports to China and other emerging economies will keep manufacturers such as Texas Instruments Inc., helping the economy expand.
“It’ll be a challenge to maintain the momentum” in machinery orders, Ryan Wang, an economist at HSBC Securities USA Inc. in New York, said before the report. “But we still have this uptrend.”
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| Main USD/CAD data today: |
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1. USD - Durable goods & initial jobless claims data.
2. CAD - No relevant data.
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