Tuesday, September 30, 2014

Gold remains under pressure

Gold remains under pressure on Tuesday, as the metal continues to lose ground to the strong US dollar. In the European session, the spot price stands at $1207.40 per ounce. On the release front, todays key event is CB Consumer Confidence, with the markets expecting another strong reading above the 90-point level.The sharp gains by the US dollar is weighing on gold prices, as a stronger dollar diminishes the metal’s appeal as an alternative asset to the dollar. The dollar has enjoyed a spectacular September, and gold prices have tumbled over 6% during this period. We could see gold dip below $1200, which last occurred in December.


Consolidation was the name of the game on CAD today, USD/CAD effectively contained in the 1.1250-1.1290 range, while EUR/CAD held above 1.4265. Canadian payrolls release due out tomorrow has been volatile lately, not surprising considering it's a household survey, similar to the very volatile US household employment survey. A large deviation from the expectation may send the market bouncing around but this will change little from the BoC's standpoint as the bank is all but certain to keep rates unchanged on Oct 17. The US employment report and USD sentiment will probably dominate tomorrow. We are still not fully convinced by the latest breakout and would like to see a decisive break of 1.1346 before declaring an end to the current 2-month range

Monday, September 29, 2014


 EUR/USD   Daily
14::10 GMT - Recovery has been capped in the 1.2700/20 res. band and  prices have settled back. 1.2685/90 should be sup. now and this should hold if the recovery is going to extend. If it fails, a retest of 1.2661 should follow.N.I.

Friday, September 26, 2014

Diverging monetary policies have fueled the U.S. dollars strength

Diverging monetary policies have fueled the U.S. dollars strength this summer, more so against the EUR than any of the other Group of Seven (G-7) currencies. On Thursday, the pressure applied to the single unit managed to push it to its weakest outright level (รข‚¬1.2697) in almost two years. To date, the greenback has ridden the wave of quantitative easing (QE) tapering and the prospect of a mid-2015 rate hike, and because of that, the market has been able to ride the telegraphed last five-cent EUR freefall with very little obstruction.
Gold headed for the first weekly advance this month as a retreat in global equities and tensions in the Middle East boosted demand for a protection of wealth, countering expectations for higher U.S. borrowing costs.
Bullion for immediate delivery rose 0.4 percent to $1,226.90 an ounce at 9:46 a.m. in Singapore, extending yesterdays 0.4 percent advance, according to Bloomberg generic pricing. The metal is 0.9 percent higher this week, rebounding from a drop on Sept. 22 to $1,208.40, the lowest since Jan. 2.
Gold remains on course for the first quarterly loss this year as the Bloomberg Dollar Spot Index climbed to a four-year high. A report today may show the U.S. economy grew more than previously estimated after data yesterday showed jobless claims rose less than forecast. Saudi Arabia, Jordan, Bahrain, Qatar and the United Arab Emirates joined the first wave of U.S.-led airstrikes against Islamic State militants in Syria this week.

Thursday, September 25, 2014

US dollar strength

Diverging monetary policies have fueled US dollar strength this summer, but Chapdelaine Foreign Exchange's Doug Borthwick thinks a pullback is coming. The greenback has ridden the wave of QE tapering and prospect of a mid-2015 rate hike. But further strength will need to be derived from how the Fed manages its balance sheet, and here, Borthwick thinks any wind down will be a drawn out process. Meanwhile, any ECB effort to boost its balance sheet is limited within its ABS-buying program. "This may be the point where the market digests recent comments and pulls back the excitement as recent rhetoric shows the foundation to the trade is not exactly built on stone."

Wednesday, September 24, 2014


 EUR/USD   Daily
13::40 GMT - Mkt. has broken to a new low and we should see a run down to the 1.2745/55 area next. Initial res. is at recent lows at   1.2810/20.N.I.

USD/CAD has taken a breathe

After strong gains this week, USD/CAD has taken a breather on Wednesday, as the pair trades in the mid-1.10 range in the European session.  The Canadian dollar has sagged, losing over 100 points since Monday. On the release front, today highlight is US New Home Sales. The markets are expecting the indicator to improve in the upcoming release. There are no Canadian releases on Wednesday.
It was a poor start for Canadian numbers this week as retail numbers were dismal in August. Core Retail Sales slipped by 0.6%, the indicator’s first decline since January. The estimate stood at -0.1%. Retail Sales also softened, posting a decline of -0.1%. The markets had anticipated a gain of 0.4%. The weak figures point to decreasing spending by Canadian consumers, which does not bode well for the Canadian economy, as consumer spending is a critical engine for economic growth.