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Tag Archives: CAD

Broadly Mixed Dollar in a Mostly Quiet Market

The US dollar is mostly little changed against the major, as befits a summer session.  There are two exceptions.   The first is the New Zealand dollar.  Comments by the central bank's governor played down the need for urgent monetary action and suggested that the bottom of cycle may be near 1.75% for the cash rate, which currently sits at 2.0%. This means that a cut next month is unlikely.  November appears to be a more likely timeframe.   The second exception is...

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Fischer Joins Dudley; Waiting for Yellen

Last week, some market participants were giving more credence to what seemed like dovish FOMC minutes than to NY Fed President Dudley's remarks that accused investors of complacency over the outlook for rates.  Yesterday, Vice-Chairman of the Federal Reserve Fischer seemed to echo Dudley's sentiment, and this has underpinned the dollar and is the major spur of today's price action. Although Fischer's speech was focused on the slowdown in productivity, he reaffirmed that...

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Dollar Recovers into the Weekend

The US dollar is trading firmly ahead of the weekend as part of this week's losses are recouped. The gains are sufficient to put it higher for the week against the Australian dollar.  If its gains against the Aussie are sustained, it would be only the second weekly gain since the end of May.  Although the news stream is light, the Aussie has been undermined by the one of the few developments today.  Moody's cut the outlook for five Australian banks from steady to negative,...

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US Dollar Pushed Lower, but Do FOMC Minutes Really Trump Dudley?

It is not a good day for the US dollar.  It is being sold across the board.  The seemingly dovish FOMC minutes released late yesterday appears to have gotten the ball rolling.  The takeaway for many was that any officials wanted more time to assess the data at the July meeting.   The question is whether two months more data is sufficient.  The market did not have much confidence (less than one in four) chance of a hike in September.   Dudley, like other Fed officials,...

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Dollar Eases to Start the New Week

The US dollar closed the pre-weekend session well off its lows that were seen in response to the disappointing retail sales report.  It has been unable to sustain the upside momentum, and as North American dealers prepare to return to their posts, it is trading lower against most of the major currencies. The notable exceptions are the Scandi-bloc, which are consolidating last week's gains, and sterling, which remains pinned near $1.29. The main economic news was the...

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Dollar’s Downside Beckons in the Week Ahead

The dollar's push lower that we anticipate until later in the month gained momentum following the disappointing US retail sales report before the weekend.   The dollar's technical tone has deteriorated, while the economic data is unlikely to be sufficient to reverse sentiment.  The Dollar Index managed to recouped about half of the retail sales induced fall.  A break of the 95.00, the low from the start of the month, would be a bearish sign, signaling a potentially...

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Stocks Up, Bonds Down, Dollar and Yen are Heavy

Investors favor risk assets today.  Global stocks are moving higher in the wake of the pre-weekend US rally that saw the S&P 500 close at record levels.  Bond yields are mostly firmer, again with US move in response to the robust employment report setting the tone in Asia.  European bonds participated in most of the pre-weekend move and are consolidating today with a slightly heavier tone.  UK Gilts are outperforming, with a new record low of 64 bp on the...

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Does the Strong Employment Report Give the Greenback Legs?

The robust US employment report before the weekend allowed the dollar to recoup the losses it experienced earlier in the week against most of the major currencies. The Australian dollar and Japanese yen managed to hold onto minor gains for the week.   The US Dollar Index stalled in front of a band of resistance (96.45-96.55), which houses the 61.8% retracement of the decline from July 27 (97.55) and the 20-day moving average.  The technical indicators look constructive as...

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Kuroda Hesitates, Yen Advances, Focus Turns to Europe and North America

Bank of Japan Governor Kuroda appears to be the central banker that the markets have the most difficulty in reading.  The activist Governor provide the barest of tweaks to what is by nearly any reckoning among the most aggressive monetary policies by a high income economy.  Moreover, much of the important data reported during the BOJ's meeting, including inflation and consumption were weaker than expected.   The BOJ increased its ETF purchases from JPY3.3 trillion a...

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Oil and Economy Pull the Canadian Dollar Lower

Our informal and simple model for the Canadian dollar has three variables.  Oil, interest rates, and general risk environment.  Over time, the coefficient of the variables can and do change.   Of the three variables, the general risk environment is the most supportive of the Canadian dollar.   Between the BOJ and ECB more than $150 bln a month of central bank, credits are being created.  This is one of the key factors driving interest rates down in Europe and Japan. ...

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