The US dollar is recording an outside down day against the Canadian dollar. That is, it has traded on both sides of yesterday’s range and the US dollar looks likely to finish the New York session below yesterday’s low of ~CAD1.0420. The BOC hiked rates as was widely expected and traders searched high and low for all sorts of reasons for its weakness. Today’s gains lend credence to our idea that yesterday’s disappointing price action had to do more with the general market conditions and the unwinding of risk. The US dollar is breaking below the 20-day moving average, something that has not happened since May 13th, which was a one-day wonder. The dollar has not closed below its 20-day moving average since April 26th. The break below CAD1.04, which is the 50% retracement of the USD rally. The next objective comes in near CAD1.0280. We look for a test on parity again toward the middle of Q3.
….read about Sterling and the Euro HERE
Marc Chandler joined Brown Brothers Harriman (http://www.bbh.com/) in October 2005 as the global head of currency strategy. Previously he was the chief currency strategist for HSBC Bank USA and Mellon Bank. Marc is a prolific writer and speaker. In addition to being frequently called up to by… More