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We provide investors with valuable alternatives in the Forex marketplace. These include innovative educational opportunities, comprehensive research, superior analytical tools and state-of-the-art electronic trading capabilities.The Loonie (CAD) has already touched parity with USD earlier this morning and is likely to weaken further as higher CPI data in Canada has been dismissed in favor of risk aversion due to a slowing global economy and the Euro debt crisis.  While inflation may be elevated and higher


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The Loonie (CAD) has already touched parity with USD earlier this morning and is likely to weaken further as higher CPI data in Canada has been dismissed in favor of risk aversion due to a slowing global economy and the Euro debt crisis.  While inflation may be elevated and higher than expected, it is not out of line with what other regions are seeing around the globe, with the headline figure coming in at 3.1%.  It is extremely unlikely that the BOC will move on rates considering the health of the global economy.

Part of the reason for the weakening of the Loonie is that the global economy is slowing which in turn reduces the demand for oil, which has a high correlation to the value of the Loonie.  In addition, if the US Fed follows through with “Operation Twist” at today’s FOMC announcement, that is unlikely to weaken the US dollar significantly in the short-term.

If the US Dollar gains, then oil and the Loonie are likely to move lower.  While there is triple-top resistance on the chart below at parity for USD/CAD, three times is usually a charm and I expect the Loonie to break through that resistance and trade up to its daily R4 pivot resistance level at 1.01 in the near term.

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