With the Bank of Canada set to meet tomorrow, today’s focus is on theCanadian Dollar. Overnight trading action indicates a higher openingfor the Canadian Dollar spurred by higher expectations in the U.S.equity markets and firmer crude oil.
With the Bank of Canada set to meet tomorrow, today’s focus is on the Canadian Dollar. Overnight trading action indicates a higher opening for the Canadian Dollar spurred by higher expectations in the U.S. equity markets and firmer crude oil.
Investors should look for the USD CAD to open sharply lower at about 1.1042. Much of this weakness overnight can be attributed to the unexpected news regarding the CIT Group. Late last week, investors were looking for this small business lender to file for bankruptcy protection after the U.S. government balked on a request to bail it out.
Over the weekend the CIT Group reached an agreement with bondholders to provide as much as $3 billion in emergency funding. With bankruptcy avoided for the time being, investors drove up equity prices and triggered greater demand for higher risk assets including the Canadian Dollar.
Look for the EUR USD to push higher today now that it has broken through the recent swing top at 1.4201. Upside momentum seems to be building for a rally to 1.4337.
The main trend is still down in the GBP USD but traders seem to be thinking that the global economic recovery is back on track as the current price action suggests this market has the power to rally to the high for the year at 1.6743.
Downside pressure on the USD CHF has this currency pair in a position to challenge the lower end of the trading range at 1.0632. Breakdown under this level could trigger a sharp acceleration to the downside.
Stronger demand for higher yielding assets is putting pressure on the Japanese Yen. Now that the USD JPY has regained a 50% level at .9436, look for upside momentum to take it to the next retracement level at .9498.
Stronger global equity markets and expectation of a higher opening in the U.S. is helping to generate sizeable rally in the AUD USD. The expanded range overnight has this market in a position to challenge the recent swing top at .8155.
The NZD USD is exhibiting unusual strength overnight. Greater demand for higher yielding assets drove this currency pair through the last swing top at .6549 to reaffirm the uptrend. If upside momentum continues then look for a further rally to .6590.