| Technical Ranges
CAD, USD, EUR, GBP & JPY
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USD/CAD
Support: 0.9485
Resistance: 0.9563
CAD/JPY
Support: 84.98
Resistance: 86.45
EUR/CAD
Support: 1.4033 Resistance: 1.4110
EUR/USD
Support: 1.4738 Resistance: 1.4860
GBP/USD
Support: 1.6598 Resistance: 1.6698
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Currency Commentary
EUR, USD, CAD, GBP , JPY
EUR:
Asian Rebound from Tuesday's low at 1.4490 extended yesterday, on Dollar weakness after Bernanke showed its commitment to maintain interest rates near zero, and the pair rose to fresh 16-month highs at 1.4885, to consolidate above 1.4825 during the European session.
USD: This morning's weaker than expected Initial jobless claims and GDP numbers..is currently providing a bullish trend for the USD/CAD. The pair still remains in the same levels as yesterday....0.9500 to possibly higher.
The Fed's comments..was dovish, QE2 ends this June. What I found interesting about the Fed and their FOMC comments...similar to our B.O.C...is that they will play the markets like a "roller coaster ride". As an example..the Fed in March statement...stating "economy on firmer footing"...and yesterday "moderate pace". The bigger picture is..how much more can the U.S put themselves in debt...."stimulus spending" is not the answer...just a temporary fix.
Tomorrow due out to end the week in the U.S....Univ. of Mich. Confidence report, Personal spending and Bernanke will be speaking at a conference in Atlanta. What good news will Ben provide the markets tomorrow???
CAD: Oil, metals and equity markets are up..but for how long? Once the U.S. equity markets open..will the USD/CAD bullish trend continue or reverse? Next week the elections for Canada...how will that play out on the Loonie...or will it have no effect??
Our clients are placing orders..similar to the past 2 days to buy @ 0.9500 and sellers..similar to last week ... @ 0.9600.
Expected range... similar to yesterday possibly higher 0.9400 to higher 0.9500
GBP:
The Pound rally has reached multi-month highs at 1.6745, above here, the pair will face resistance at 1.6830/45 and 1.6880, which, if breached could extend rally to 1.7045, according to Carol Harmer, technical analyst at
JPY:
The Dollar recovery from one-month low at 81.25 yesterday was capped at 82.80 high, and the pair, weighed by post-Fed Dollar weakness, has retraced practically the whole recovery, reaching 81.50 low, before picking up to 81.80 area.
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" Why the U.S. dollar is ' under assault ' today "....
" the Fed is putting concerns over high unemployment before the threat of inflation as the U.S. struggles back from the recession ".....
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The U.S. dollar is sinking today, dropping to its lowest level in about three years, after the Federal Research signalled yesterday it plans no change in monetary policy any time soon.
In turn, currencies such as the Australian dollar and the loonie rose.
The U.S. central bank’s policy-setting panel, the Federal Open Market Committee held its benchmark rate at a historic low near zero and suggested no change is planned. As Globe and Mail Washington correspondent Kevin Carmichael reports today, the Fed is putting concerns over high unemployment before the threat of inflation as the United States struggles back from the recession.
“The dollar is under assault and there really is no other way to explain what is taking ... and has been taking … place in the [foreign exchange] market since yesterday afternoon following the FOMC’s decision and then worsened following Dr. Bernanke’s precedent-setting post-meeting press conference,” said Dennis Gartman, publisher of The Gartman Letter.
“Simply put, we came away from the post-meeting communiqué believing that this was a demonstrably dovish commentary by the committee; that the authorities were more than willing to err manifestly upon the side of easier rather than tighter policies, and that the dollar was for all intents the sacrificial lamb that was going to be taken out for slaughter, mincing as few words as we might in this instance.”
The strength of the loonie, said Scotia Capital economists Karen Cordes Woods and Derek Holt, puts the timing of an interest rate hike by the Bank of Canada into question.
“Indeed, while we've long been of the view that the BoC is on hold until October and have been consistently later than consensus as it has shifted from Spring to July hikes, we attach greater tail risk to taking the BoC entirely out of the picture in 2011 than the tail risk of going earlier than our call,” they said.
“Of [the loonie’s] 35-cents appreciation over about the past two years, about one-third of that has occurred since later last summer. Even as the country's inflation-adjusted monthly trade deficit has plunged to record lows into the new year, it's entirely possible that not enough time has been given for lagged effects to really grip growth and inflation with downside consequences to both.”
Article provided via The Globe and Mail
http://www.theglobeandmail.com/report-on-business/top-business-stories/why-the-us-dollar-is-under-assault-today/article2001813/
" USD- America's economic growth slows "..
" we hit a bit of a soft patch in the 1st qtr, but that should prove temporary because weather was a drag and we got blindsided a bit by a jump in gasoline prices late in the quarter " ...
U.S. economic growth slowed more than expected in the first quarter as higher food and gasoline prices dampened consumer spending, and sent a broad measure of inflation rising at its fastest pace in 2-1/2 years.
But the pull back in output, which was also the result of harsh winter weather, a widening trade gap as well as weak government spending, will probably be fleeting given a firming labor market.
Growth in U.S. gross domestic product — a measure of all goods and services produced within U.S. borders — braked to a 1.8% annual rate after a 3.1% fourth quarter pace, the Commerce Department said on Thursday. Economists had expected a 2% growth pace.
“We hit a bit of a soft patch in the first quarter, but that should prove temporary because weather was a drag and we got blindsided a bit by a jump in gasoline prices late in the quarter,” said Ryan Sweet, a senior economist at Moody’s Analytics before the report was released.
The Federal Reserve on Wednesday acknowledged the slowdown in first-quarter growth, describing the recovery as proceeding at a “moderate pace” — a slight step back from a statement in March when it said the economy was on a “firmer footing.”
It trimmed its growth estimate for 2011 to between 3.1 and 3.3% from a 3.4 to 3.9% January projection.
The U.S. central bank signalled it was in no rush to start withdrawing the massive monetary stimulus it has lent the economy. It confirmed plans to complete its $600 billion bond buying program in June.
Growth in the first quarter was curtailed by a sharp pull back in consumer spending, which expanded at a rate of 2.7% after a strong 4% gain in the final three months of 2010.
Rising commodity prices meant the households that drive about 70% of U.S. economic activity had less money to spend on other items. The report also underscored the pain that strong food and gasoline prices are inflicting on households.
A broader measure of inflation, the personal consumption expenditures price index, rose at a 3.8% rate — its fastest pace since the third quarter of 2008 — after increasing 1.7% in the fourth quarter.
The core index, which excludes food and energy costs, accelerated to a 1.5% rate – the fastest since the fourth quarter of 2009 — from 0.4% in the fourth quarter. The core gauge is closely watched by Fed officials, who would like it around 2%.
Still, economists expect consumer spending to trend higher in the second quarter, mostly on the belief gasoline prices will not rise much above US$4 a gallon on average.
Ironically, the labour market, which until recently had lagged the economic recovery that got under way in the second half of 2009, is seen underpinning growth in the coming quarters. Exports are also seen shouldering the recovery.
The economy added 216,000 jobs in March, the most in 10 months and the unemployment rate dipped to a two-year low of 8.8% from 8.9% in February.
In the first quarter, growth was also curbed by the trade deficit as a need for businesses to rebuild inventories sucked in imports. Export growth slowed.
A widening trade deficit weighs on GDP growth because it shows more U.S. demand being sated by overseas production. Nevertheless, strong import growth has been seen as a sign of underlying strength in domestic demand.
Restocking by businesses picked up pace, with inventories increasing US$43.8 billion after a US$16.2 billion rise in the fourth quarter. Inventories added 0.93 percentage point to GDP growth. Excluding inventories, the economy grew at a pedestrian 0.8% pace, reflecting important pockets of weakness, after a brisk 6.7% rate in the fourth quarter.
Business spending on equipment and software gained pace from the prior quarter, but government spending contracted at its fastest pace since the fourth quarter of 1983. Home building made no contribution, while investment in nonresidential structures dropped at its quickest pace the fourth quarter of 2009. However, motor vehicle output added 1.4 percentage point to economic growth last quarter.
Article provided via The Financial Post
http://business.financialpost.com/2011/04/28/americas-economic-growth-slows/
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| Main USD/CAD data today: |
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1. USD - GDP, Initial jobless claims & Personal consumption data.
2. CAD - No relevant data.
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