The Canadian Dollar Outlook Hinges On BoC Rate Decision, Policy Report

The Canadian Dollar Outlook Hinges On BoC Rate Decision, Policy Report
Analyst 14. Juli 2012 00:00 GMT 

undamentale Prognose für Gold: Baisse
Der kanadische Dollar gewann an Boden gegen Gegenstück U.S. inmitten den Rebound in Gefahr Gefühl kann, doch die Loonie zu behaupten die Bank of Canada einen vorsichtigen Ausblick für die Region Streik sollte nächste Woche. Das BoC Zinssatz Entscheidung das größte Ereignisrisiko für die folgende Woche zeigt, wie Gouverneur Mark Carney sich Spekulationen für höhere Fremdkapitalkosten spricht, aber Marktteilnehmer weiter können, zurück zu skalieren Wetten für eine Zinsanhebung die Staatsschulden-Krise weiterhin eine Bedrohung für die Region darstellen.
Tatsächlich Gouverneur Carney machte zahlreiche Versuche, auf den Datensatz Anstieg der Haushaltsverschuldung zu sprechen, und vielleicht sehen wir die Zentralbank Kopf weiterhin die Idee für eine mögliche Zinserhöhung inmitten Ängste vor einer Immobilienblase zu schweben. Obwohl wir Lichtblicke in der kanadischen Wirtschaft sehen, beschränkten die BoC Gesichter Bereich um das Normalisieren Geldpolitik inmitten der anhaltenden Turbulenzen in Europa. Dadurch können wir die Zentralbank seine warten-and-See-Ansatz in 2013 tragen sehen. In einer Umfrage von Bloomberg News Übernachtung alle der 22 Ökonomen Befragten Prognose BoC Zinssatz 1,00 % halten, während den Marktteilnehmern die Zentralbank Festhalten an seiner warten-and-See-Ansatz über die nächsten 12 Monate laut Credit Suisse finden Sie unter Index Swaps.
Zur gleichen Zeit werden wir genau verfolgt werden den vierteljährlichen geldpolitischen Bericht due out am 18. Juli wie die Zentralbank ihre aktualisierten Prognose für Wachstum und Inflation sowie den Bericht mein Highlight eine geschwächte Outlook für die Region präsentieren wird wie die USA – Kanadas größter Handelspartner – eine Verlangsamung Erholung steht. Wiederum die frische Charge der Zentralbank Rhetorik kann dämpfen die Beschwerde mit dem kanadischen Dollar, aber der Verbraucherpreis-Bericht vom Fass für Freitag erneuere Spekulation für höhere Kreditkosten wie die Kern-Rate der Inflation erwartet wird, um im schnellsten Tempo für 2012 zu erweitern. Als die USDCAD weiterhin über die 78.6 % Fibonacci-Retracement aus der 2007 halten, niedrig, die 2009 um hohe 1.0100-10, wir sehen weiterhin, dass das Paar eine kurzfristige Basis um die Kennzahl aufbauen und die technische Perspektiven flößt eine Hausse Voreingenommenheit für die Dollar-Loonie als der relative Stärke Index Pausen heraus von den Abwärtstrend. Wiederum eine ganze Reihe von Leitzinssenkung Kommentare von BoC einen anderen laufen bei 1.0400 auslösen kann, und frische 2012 Höhen des Wechselkurses können wir sehen, wie er sich ein höheres tief im Juli schnitzt. -DS
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14. Juli 2012 00:00 GMT

$$$ USD Looks Higher Despite Being Overbought, AUD Outlook Hinges On RBA

04 June 2012 16:05 GMT

Index	Last	High	Low	Daily Change (%)	Daily Range (% of ATR)
DJ-FXCM Dollar Index	10225.88	10271.92	10211.64	-0.11	110.02%

he Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.11 percent lower from the open after moving 110 percent of its average true range, and it looks as though the greenback has carved a short-term top coming in June as it threatens the upward trending channel carried over from the previous month. Although currency traders are look for a short-term correction in the greenback, the recent selloff in the USD may turn out to be a false break, and we will keep a close eye on the 30-minute relative strength index as it bounces back from oversold territory. As the oscillator continues to find support around 27, we may see the dollar consolidate ahead of the Fed’s Beige Book on tap for later this week, but the central bank may continue to strike a cautious tone for the world’s largest economy amid the ongoing slack in private sector activity.

As the USDOLLAR continues to bounce off of the 10-Day SMA (10,210), the RSI on the daily chart may hold in overbought territory, and we may see the greenback work its way back towards the 10,300 figure as the ongoing threat for contagion drags on market sentiment. Although European policy makers are looking to recapitalize the banking system through the European Stability Mechanism, it seems as though the recent movement is merely another attempt to buy more time as Germany continues to oppose broadening the scope of the permanent bailout fund. As there appears to be a growing rift within the EU, there’s speculation that the European Central Bank may offer some relief at the rate decision scheduled for Wednesday, but we may see the Governing Council move away from its nonstandard measures as they have a limited impact in addressing the risks surrounding the real economy. In turn, ECB President Mario Draghi may look to target the benchmark interest rate, and the dollar may continue to benefit from the ongoing turmoil in the euro-area as investor confidence remains frail.

 Three of the four components advanced against the greenback, led by a 0.47 percent rally in the Euro, while the Australian dollar added 0.15 percent ahead of the Reserve Bank of Australia interest rate decision on tap for Tuesday. According to a Bloomberg News survey, 16 of the 27 economists polled are looking for a rate cut, while market participants are pricing a 63 percent chance for a 50bp rate cut according to Credit Suisse overnight index swaps. In light of the dovish rhetoric from the RBA, we may see the central bank continue to take an aggressive approach in addressing the risks surrounding the $1T economy, and the board may carry its easing cycle into the second-half of the year as the slowdown in China – Australia’s largest trading partner – threatens to derail the recovery. In turn, the AUDUSD may face another selloff going into the middle of the week, and the high-yielding currency may continue to give back the rebound from October as the flight to safety gathers pace.

- EUR Losses To Accelerate On Spain, Greece – GBP Outlook Hinges On BoE

Talking Points
Euro: ECB Sees Risk Of Greek Exit, June Forecast To Highlight Prolonged Recession British Pound: BoE To Stay On Hold Through 2013 As Inflation Report Comes Into Focus U.S. Dollar: China Cuts RRR By 50bp Ahead Of FOMC Minutes Euro: ECB Sees Risk Of Greek Exit, June Forecast To Highlight Prolonged Recession
The Euro slipped to a fresh monthly low of 1.2829 as Spain sold EUR 2.9B in bills versus the EUR 3.0B target, while the yield tied to the region’s 10-Year debt advanced to 6.33% from 6.22% following the auction. Beyond the heightening risk for contagion, policy makers in Greece are certainly running out of time as they struggle to form a coalition, and the threat of a Greek exit certainly raises the risk for a major selloff as the fundamental outlook for the region turns increasingly bleak.
Meanwhile, European Central Bank board member Luc Coene said Greece leaving the monetary union ‘would be possible’ according to an interview with the Financial Times, and went onto say that the revised economic forecast scheduled for June may highlighta ‘slight deterioration in growth’ as the region continues to face a risk for a prolonged recession. However, Mr. Coene talked down speculation for additional asset purchases as the non-standard measures have a limited impact in addressing the debt crisis, and it seems as though the Governing Council is looking to target the benchmark interest rate as its ballooning balance sheet comes under scrutiny. As the EURUSD continues to give back the advance from earlier this year, we should see the pair fall back towards the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50, but we will keep a close eye on the relative strength index as it slips into oversold territory.
British Pound: BoE To Stay On Hold Through 2013 As Inflation Report Comes Into Focus
The British Pound pared the overnight decline to 1.6050 as ongoing turmoil in Europe increased the appeal of the sterling, and the GBPUSD may track higher in the coming days should the Bank of England highlight an improved outlook for the U.K. As the BoE’s quarter inflation report comes into focus, there’s speculation that Governor Mervyn King will keep the benchmark interest rate on hold until late next year, but the central bank head may sound increasingly hawkish this time around as the stickiness in underlying price growth raises the risk for inflation. As the Monetary Policy Committee anticipates to see a more robust recovery in the second-half of 2012, we may see the board start to discuss a tentative exit strategy, and we should see the fresh highs in the GBPUSD as it maintains the upward trend from earlier this year. However, as the short-term correction continues to play out, we are still looking for a test of former resistance around 1.6000 for support, and we may see the pound-dollar continue to consolidate ahead of the BoE inflation report as market participants weigh the outlook for monetary policy.
U.S. Dollar: China Cuts RRR By 50bp Ahead Of FOMC Minutes
The greenback continued to gain ground on Monday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) rallying to a fresh monthly high of 10,049, and the reserve currency may appreciate further over the next 24-hours of trading as the flight to safety gathers pace. Indeed, the People’s Bank of China’s announcement to cut the reserve requirement ratio by 50bp is having a limited impact on the market as the sovereign debt crisis continues to drag on investor confidence, and we should see risk sentiment continue to dictate price action across the major currencies as the economic docket remains fairly light for the North American session. However, as the Fed’s policy meeting minutes highlight the biggest event risk for this week, we may see the dollar consolidate going into the middle of the week, but the fresh batch of central bank rhetoric may continue to instill a bullish outlook for the greenback should the Fed drop its dovish tone for monetary policy. As the economic recovery gathers pace, we may see the FOMC may hold an improved outlook for the second-half of the year, but we may see a growing rift within the committee as Fed Chairman Ben Bernanke keeps the door open to expand monetary policy further.
--- Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong
To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.
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$$ Australian Dollar at Pivotal Point - Outlook Hinges on CPI, FOMC

Fundamental Forecast for Australian Dollar: Neutral

• AUDUSD: Standing Aside on Conflicting Cues
• AUD/USD Classical Technical Report 04.20
• AUDUSD 10390 Important for Friday

The Australian dollar is modestly firmer at the close of trade this week with a meager gain of just 0.07 percent. While data out of Australia was rather sparse this week, minutes from the RBA policy meeting re-affirmed expectations that the central bank will look to further ease monetary policy, specifically if the “inflation outlook moderates.” With key inflation data and the FOMC policy meeting on tap next week, the pair remains at risk with the exchange rate looking to test channel resistance dating back to March 6th.

Looking ahead, investors will be closely eying inflation data early in the week with the pace of price growth expected to ease to 2.2% y/y from a previous read of 3.1% y/y. With the RBA having already explicitly stated that members see room for further easing if the inflation outlook moderates, expectations for an interest rate cut will be solidified with Credit Suisse overnight swaps already factoring in a 95% chance of a 25basis point cut at the next meeting with twelve month expectations calling for an additional 94 basis points in cuts. It’s important to note however that a rate cut may be largely priced in at this point and the downside pressure from the print may be tempered. If core CPI comes in stronger than expected however, the RBA may be reluctant to move on rates as inflationary concerns begin to take root with such a scenario likely to be bullish for the aussie. 

The FOMC interest rate decision on Wednesday steals the spotlight with Bernanke taking the stage for the quarterly press conference and interest rate forecasts. We maintain that with the core rate of inflation continuing to top expectations, the stickiness in prices are likely to limit the Fed’s scope for further easing. The individual interest rate projections form the committee will be of extreme significance and if we see member beginning to pare back their expectations to anchor rates through late 2014 look for the dollar to remain well supported with risk sentiment likely to remain on the defensive as investors begin to contemplate life without the crutch of central bank easing. 

From a technical standpoint, the aussie has continued to trade within the confines of a descending channel formation dating back to the March 6th with the exchange rate closing just above the 200-day moving average at 1.0370. A breach above this level eyes critical resistance at the April high at 1.0465 and the February low at 1.0570. Interim support rests with the weekly low at the 1.030-handle backed by the 61.8% Fibonacci retracement taken from the December advance at 1.0240. While we continue to favor the downside for the AUDUSD, we remain on the sidelines pending a break below the weekly low or a more broad-based risk sell-off. For complete aussie scalp targets refer to this week’s Scalp Report. - MB

USD Outlook Hinges On FOMC Minutes, AUD Slumps On Rate Expectations

Index	Last	High	Low	Daily Change (%)	Daily Range (% of ATR)
DJ-FXCM Dollar Index	9937.55	9951.86	9894.82	0.19	86.19%

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.19 percent higher on the day as currency traders scaled back their appetite for risk, and we expect to see the bullish sentiment underlining the greenback gather pace going into the middle of the week as long as the Fed continues to soften its dovish outlook for monetary policy. As the dollar continues to find interim support around 9,900, we should see the index breakout of the downward trending channel, but we may see the descending triangle continue to take shape should the central bank keep the door open to expand its balance sheet further.

The upward trending channel in the index continues to reinforce our call for more dollar strength, but we are keeping a close eye on the bearish divergence in the relative strength index as it points to a sharp selloff in the reserve currency. As the technical outlook paints a mixed picture for the USD, we will be looking at the fundamentals to generate a clearer bias for the dollar, and the FOMC Minutes may spur increased demands for the reserve currency as Fed officials see the recovery on a more sustainable path. In turn, the policy statement may dampen speculation for another large-scale asset purchase program, and the developments could be the catalyst to push the greenback back towards the 78.6 percent Fib around 10,118 as interest rate expectations pick up.


Three of the four components weakened against the reserve currency, led by a 0.33 percent decline in the Australian dollar, and the high-yielding currency is likely to face additional headwinds over the near-term as the Reserve Bank of Australia looks to carry out its easing cycle throughout 2012. According to Credit Suisse overnight index swaps, market participants are looking for 75bp worth of rate cuts over the next 12-months, and we may see Governor Glenn Stevens shore up the ailing economy throughout the year as China – Australia’s largest trading partner – continues to face a risk for a ‘hard landing.’ As the AUDUSD carves out a key top in the first quarter, we should see the pair maintain the downward trend carried over from the previous month, and the aussie-dollar looks poised to give back the advance from earlier this year as the dovish remarks from the RBA drags on interest rate expectations.