Updates (2013-2014)

Expected USD/CAD Range: 1.034 – 1.040

Update:  The Canadian Dollar which was already trading at a three week high this morning gained further ground after the release of data indicating that building permits in July were up 21% (versus an expected increase of 3.5%) over previous month.  The increase was largely in the non-residential sector and is not likely to impact BoC’s view of the residential real estate market.  The Loonie is currently at 1.037 with the market still very much focused on developments out of Congress this week with respect to Syria and diplomatic developments overseas.

The Big Picture:  The commodity boom has seemingly ended (or is at least sputtering).  Relatedly, Chinese and other…

Expected USD/CAD Range: 1.037 – 1.043

Update:  The Canadian Dollar is up over 1% and trading at 1.040, the strongest level in about three weeks.  The primary market mover was the jobs numbers released this morning.  The US figures came in below expected levels and there was a significant downward revision to last month’s figures.  At the same time, the Canadian job creation data (which is quite a bit more volatile for underlying statistical reasons) came in at roughly three times the consensus level.  After the announcement, the Loonie immediately jumped 40 pips to add to the gains overnight on the back of stronger commodity prices.

The Big Picture:  The commodity boom has seemingly ended (or is at least sputtering).  Relatedly, Chinese and other emerging market economies have…

Expected USD/CAD Range: 1.046 – 1.051

Update:  After a series of economic data this morning showing steady improvement in the US economy, the Loonie is flat at 1.048.  We have also heard overnight from several central banks, most notably the Bank of Japan (policy steady as economy improves modestly), the Bank of England (policy steady) and the European Central Bank (slow recovery and accommodative policies to continue).  The markets are still digesting the information but there is actually little surprise in any of the news this morning.  Market participants continue to keep an eye on developments relating to Syria with the focus today on any comments coming out of Russia and the G20 meeting that might indicate a desire by the US to seek a diplomatic solution before engaging in military action.

The Big Picture:  The commodity boom has seemingly ended (or is at least sputtering).  Relatedly, Chinese and other emerging market economies have…

Expected USD/CAD Range: 1.046 – 1.051

Update:  The Canadian Dollar is up 0.5% and currently trading at 1.048, the strongest level for the currency in five days.  Most of the move happened overnight as better than expected GDP figures out of China contributed to healthy positive moves to all “risk” currencies, including the Loonie.  In addition, as expected, the Bank of Canada’s release this morning maintained the mildly hawkish bias contributing to the strength of the Canadian Dollar.

The Big Picture:  The commodity boom has seemingly ended (or is at least sputtering).  Relatedly, Chinese and other emerging market…

Expected USD/CAD Range: 1.048 – 1.053

Update:  The Canadian Dollar is stronger today after four days of losses and trading around 1.051.  The primary reason for the strength is the lowering of the tension level in Syria as military action no longer seems imminent while Obama seeks congressional approval over the next week.  Over the next several days, the markets will remain focused on the possibility of military action in Syria as well as any indication as to the likelihood of Fed tapering later this month.

The Big Picture:  The commodity boom has seemingly ended (or is at least sputtering).  Relatedly, Chinese and other emerging…

Expected USD/CAD Range: 1.051 – 1.057

Update: This morning, Canadian GDP figures came in at expected levels while US personal spending and income figures were weaker than expected. The Canadian Dollar responded by regaining some ground lost earlier in the morning and is now flat at 1.053. Going into the last weekend of the summer, the markets will be focused on the (declining?) probability of military action in Syria with any indication that the US plans to make a move leading to USD strength and vice versa.

The Big Picture: The commodity boom has seemingly ended (or is at least sputtering). Relatedly, Chinese and other emerging market economies have …

Expected USD/CAD Range: 1.045 – 1.055

Update: Remarks by the President and political and diplomatic activity over the last 24 hours seem to have reduced the likelihood of military action in Syria by the West and consequently commodity prices have moderated from their recent highs over the last couple of days. At the same time, a series of economic releases this morning in the US came in at or above expected levels. The net result is a weakening Loonie that is down 0.2% and trading at 1.051.

The Big Picture: The commodity boom has seemingly ended (or is at least sputtering). Relatedly, Chinese and other emerging market economies have …

Expected USD/CAD Range: 1.043 – 1.053

Update: The likelihood of military action by the US in Syria is dominating the headlines again today. The Loonie is up against most major currencies as crude oil trades at near two year highs. However, the Canadian Dollar is generally flat against the US Dollar at 1.0475 as the potential of Syrian action has led to broad gains by the USD as investors de-risk portfolios and move to perceived safe havens.

The Big Picture: The commodity boom has seemingly ended (or is at least sputtering). Relatedly, Chinese and other emerging market economies have …

Expected USD/CAD Range: 1.048 – 1.055

Update: Something somewhat unusual is going on this morning; crude oil is up 2% but the Canadian Dollar is down 0.3% to 1.053. Well, perhaps not so strange when you consider the dominant theme moving markets today is worries about US military engagement in Syria. The possibility of war is weighing on all risk assets, including the Loonie. With the US public war-weary, the Chinese and Russians opposed and the evidence of blame for chemical weapons use still murky, we view these worries as overstated at the moment.

The Big Picture: The commodity boom has seemingly ended (or is at least sputtering). Relatedly, Chinese and other emerging market economies have …

Expected USD/CAD Range: 1.048 – 1.055

Update: After a tumultuous week of almost relentless US Dollar strength, we are entering the last week of the summer with the Loonie at 1.050. This morning’s weaker than expected economic data (Durable Goods Orders at -7.3% vs consensus of -4.0%) will continue to fuel the debate as to whether fed tapering begins in September, and if it does, the form and extent of such a move. We have been and continue to be long-term USD bulls (see below). However, with the 2% move last week and the market now so fully convinced of imminent monetary tightening by the Fed, in the short term, it might be time to consider “selling the news” and past the time to “buy the rumor”.

The Big Picture: The commodity boom has seemingly ended (or is at least sputtering). Relatedly, Chinese and other emerging market economies have …