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Wednesday, February 22, 2012
Greenback grows
The U.S. dollar is higher against most currencies as players ponder what to do now that most of their positive expectations on a Greek debt restructuring have been met. The U.S.-Canadian-dollar pairing was breaking above parity this morning, where traders will initially find U.S. dollar sellers that are happy to be on the positive side of this level.
Experts expect traders will continue to grind higher as a sense of urgency or excitement are certainly lacking in recent trading sessions. Higher oil prices due to Middle East tensions will continue to be supportive of the Canadian dollar and keep a lid on any U.S.dollar spikes to the upside. Above 1.0050 will target 1.0085 and 1.0120 while below 0.9950 will see levels drift towards 0.9910. A move higher is the preferred scenario but patience will definitely come in handy while this move plays out.
The xxpected range today is 0.9953 to 1.0045
European manufacturing data was weaker than expected across the board, but the euro has traded within a tight range. Many were disappointed yesterday when U.S. equities did not share in the good vibes generated by the Greece agreement, remaining below 13,000 on the Dow and 1,370 on the S&P.
The expected range today for the Canadian-dollar-euro pairing is 1.3186 to 1.3281
The pound sterling opened this morning session at the 1.5645 level, underperforming against most of the crosses. Despite the recent improved economic data and higher than expected inflation, Bank of England minutes showed recent asset purchases there were less than some governors desired sparking speculation Quantitative Easing may be winding down in the U.K.
This has contributed to the GBP losing around 100 basis points overnight. The Australian dollar is opening this trading session around 1.0616. The momentum seems to be trending downwards, as it has made another low of around 1.0598 overnight. The Aussie dollar will be made trading on market sentiments, as no event risk is expected for the remaining of the week.
The New Zealand dollar is changing hands around 0.8286 heading into this North American trading session. The Kiwi loss around 48 bps overnight, however, it still cannot break through resistance levels of 0.8266. The NZD should be trading within its ranges this week.
Data Releases:
AUD: No data expected today
CAD: No data expected today
EUR: French CPI, French Flash Manufacturing PMI, French Flash Service, German Flash Manufacturing PMI, German Flash Service PMI, Flash Manufacturing PMI, Flash Service PMI, Industrial New Orders, Belgium NBB Business Climate
GBP: MPC Meeting Minutes
JPY: No data expected today
NZD: No data expected today
USD: Existing Home Sales
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