USDCAD trend reversal?

well ok, sometimes.

Canadian dollar won't reach parity with U.S. currency, analyst says


Eric Beauchesne, The Ottawa Citizen

Published: Tuesday, May 29, 2007

Canadian manufacturers will be heartened to hear that a senior analyst at Export Development Canada expects the Canadian dollar will not reach parity with it's U.S. counterpart this year, but rather will retreat from its current 30-year high of above 92.5 cents U.S. to a more export-friendly 84 cents, or lower, by year end.

However, they will be less happy to hear why Stephen Poloz, the chief economist with the federal export promotion agency, is predicting the dollar will fall.

"There is a global slowdown that is grinding through the system, and oil prices are probably going to drift lower rather than higher, and in that context you get the Canadian dollar going down, not up," Mr. Poloz said in an interview.

"But right now, we're in this phase where people seem to believe strongly that the world will decouple, and that just the U.S. economy will slow and economies everywhere else will continue to grow fast or even speed up," he added.

Those people include, among others, forecasters at the National Bank of Canada, who see the dollar hitting $1 U.S. within 18 to 24 months.

Several factors are behind expectations of parity with the U.S. dollar, including the growing belief that the Bank of Canada will soon start raising interest rates to keep a lid on inflation, which is running above its two-per-cent target.

Most economists do not expect the central bank to raise rates today, following its latest rate review, but many suspect it will hint at the likely need for higher rates as early as summer.

"If the bank doesn't hike its rate (today), we believe it won't be long before they do," TD Economics said yesterday, adding there is justification for quarter-point rate hikes in July and September, the next pre-set dates for rate adjustments.

"Indeed, they would be justified starting the hikes (today), although this seems unlikely."
"The economy is experiencing capacity pressures and inflation has breached the bank's target by a significant margin," it said.

"Moreover, weak productivity growth means the economy cannot expand strongly without compromising the inflation target."

Increases in the central bank's trend-setting rate would be followed by increases in rates for floating rate mortgages and consumer and business loans.

Other analysts, however, say the strong dollar will help keep a lid on inflation, and allow rates to remain where they are.

"The bank should be able to hold rates steady until the end of the year before implementing a measured rate hike .... as the Canadian dollar's ascent presumably buys them some time, as does the still uncertain outlook for U.S. housing," Action Economics, an online research firm, said.

With U.S. markets closed for the Memorial Day weekend yesterday, and in advance of today's interest rate announcement, the dollar remained relatively stable at 92.5 cents.

The key driver of the dollar's rise, record high prices for commodities that Canada exports, remain in place.

long @ 0700 picked up. about time.

rest up to usdcad.

I'm thinking to open a LONG positions but never traded this pair so I don't have my channels on the chart and didn't make any analysis.

Bravado,
What do you think can I still buy and try to scalp?

Thanks

draw real fast. as fast as you can. some cad data out in 5 min.

hahah, I know news coming!!!

grrr I bought

GGRRRR I have not been able to find a decent entry signal according to system this week on either USDCAD or EURCAD. It sucks to see the train leaving your behind!!!

nice rally after the squeeze
...lets see how it unfolds

LONDON (Thomson Financial) - The Canadian dollar turned lower, coming well off earlier highs against the dollar as the currency was pressured by falls on equity markets and worries about the potential fallout for commodity markets from China's measures to cool soaring share prices.

China announced overnight it was tripling stamp duty on equity market transactions, sparking falls on equity markets, with metals prices also turning lower in response.

Jamie Coleman at Thomson IFR Markets said Canada is 'quite vulnerable' to the China story due to the impact recent Chinese government measures could have on demand for commodities.

'Commodities would suffer in that environment, putting Canada's booming natural resource sector and the associated M&A explosion in jeopardy,' he said.

The Canadian dollar is one of the so-called 'commodity currencies', which tends to benefit from movements in commodities. It has enjoyed a strong run in recent weeks, boosted by rising oil prices, M&A deals in the mining sector and a series of strong data out of Canada that has sparked talk of interest rates rising.

At 3.05 pm BST, the US dollar was trading at 1.0744 cad, very close to the high for the day of 1.0749 cad.

Earlier today, the Canadian currency hit a fresh 30-year high of 1.0686 per US dollar having broken below the 1.07 level following yesterday's hawkish comments from the Bank of Canada.

The BoC left interest rates unchanged at 4.25 pct, but said it could be necessary to raise them in the near future to alleviate inflationary pressures.

'The overwhelming likelihood is that the BoC hikes rates on July 10 and moves to a data-dependent inflation bias thereafter,' said Michael Woolfolk at the Bank of New York.

Better to miss the train and catch another than to catch the wrong train.

a nice hammer on the 4h chart off the 700 mark. Missed it myself, stupid sleep. Was only supposed to be a nap, but after a few days of no sleep it turned into an 9 hour nap.

this train's got another 400 pips to go to the next station.

I re-enterd short after today's gains. If price is going up, I will add lots at the round numbers.

USD/CAD SHORT@ 1.0750

I only started with a small lotsize, because of the meeting minutes. If the news is bad for USD I'm safe. If not, I will average my position!

Hey Cgldsmth (if that really is your name!) where do you get the 400 figure from? sounds plausible, just wondered tis all.

keep sending us your calls!

WillyT

momentum and EURCAD correlate.

See?

I keep going short, too. But It might well run up to 1.0855, though, before drilling on into the deep.

Looks like it could be coming back down now off the bounce of the weekly s1, 50ma (30min chart) and 50% fib retracement level.