Tag Archives: CAD
Currency Outlook: GBP – Slave to EUR fortunes
The market remains fixated by the euro crisis, ensuring that GBP largely takes its cue from EUR-USD. We examine five potential catalysts for this link to break. While there is much fiscal pain to come, there are not yet grounds for GBP to move independently of EUR-USD.
FX Market Analysis
FX markets struggled for direction Thursday with traders nervous about putting on new bets ahead of Federal Reserve Chairman Ben Bernanke’s testimony later in the global day and Friday’s key nonfarm payrolls data.
CAD Analysis
The CAD firmed against the USD early Wednesday, as better-than-expected global economic data and a positive Portuguese bond auction helped to boost optimism over a global recovery and encouraged investors to move out of safe-haven assets.
Currency Strategy
Small and sound supersede size For the past two years, our long-term outlook has been focused on fundamentals as being the most important driver for currencies. The intensification of the euro crisis last summer made undervalued (fundamentally weak) currencies appreciate temporarily.
NZD in favor and risk appetite finally on the rise
Main conclusions SEB RAI has broken out of its previous range and looks technically set for still higher levels. AUD, CAD, EUR & NZD speculative presence are running at high levels while speculators still seem reluctant to take bets on the GBP.
CAD ANALYSIS
CAD edges briefly higher after the BOC’s Monetary Policy Report, with Canada’s inflation-targeting central bank pointing to a firming inflation profile for 2012. The profile may have dented any lingering expectations in the market that the bank is readying for a cut of its 1.00% overnight target rate.
Bank of Canada Interest Rate Decisions:
Canada’s central bank held its key overnight rate steady at the 1.00% level for the 11th consecutive time, and said there is less slack in an economy that’s now expected to return to full capacity by the third quarter of 2013, three months sooner than forecast previously.
CAD Analysis
The CAD was under pressure, as the USD broadly firmed Friday morning, after European Union sources said several euro-zone countries could face “imminent” downgrade. The USD was at C$1.0230 Friday morning, from C$1.0191 late Thursday.
Big G10 FX charts show Euro and Aussie at new opposite extremes
USD The USD/G10 basket has yet to extend beyond its recent tops as the pro-risk currencies have held their own against the greenback even as the Euro has suffered of late. The relative strength of the greenback in an environment of still elevated risk appetite is significant relative to previous behaviour.