Week in FX Americas – Loonies Flight Is Not As Clear As the EUR’s

The Loonie does not want to be left behind by its other commodity currency foes. The interest rate sensitive, oil and gold supported currency managed to print a three-month high outright on Friday against its largest trading partner, the US. Faltering only once on news that Canada’s November trade deficit was bigger than expected (-$1.98b vs. -$552b).

The currency has since resumed its grind higher. However, the market can expect quite a bit of big dollar buying interest around the 0.98 cent support mark and a little below that. Topside seems to be a different matter, with little resistance until the dollar figure above, 0.99c. Because of the Loonie touch, Goldman Sachs, the motley crew with the ‘Midas touch’ has been seen closing out their long EUR/CAD dollar positions in favor of a direct swap into EUR/USD. With their single currency positional play intact, their EUR for EUR return is better served against an underdog, like the ‘Big’ dollar rather than many investors outside thoroughbred the loonie!

Draghi’s press conference this week has few clairvoyants looking at a EUR handle just under the 1.40 print as its immediate objective.

• Demand for Treasuries back after NFP Friday
• US Weekly Claims Move Higher
• No more ‘Ninja Loans’ as Fed tightened rules
• ‘Loonie’ A Non Mover After Housing Starts
• US Tsy’s Little Changed Ahead of +$21B Debt Sale
• US Oil Output increases, WTI/Brent Spread to decrease
• Bond Yields to go up in 2013
• ‘Fear Index’ Vix may bounce back after biggest 1-week drop
• EUR/USD – Euro Moves Higher, Testing 1.31

WEEK AHEAD

• EUR German Consumer Price Index
• GBP Consumer Price Index
• USD Producer Price Index
• EUR Euro-zone Consumer Price Index
• USD U.S. Federal Reserve Releases Beige Book
• EUR ECB Publishes Monthly Report
• AUD Unemployment Rate
• NZD Consumer Prices Index (YoY)
• CNY Real GDP
• USD U. of Michigan Confidence

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