JAHResearch's Commentaries

Strong Dolllar, Weak Crude Sends Canadian Dollar Higher

by JAHResearch on Jun 15, 2009

As mentioned earlier, commodity markets were hit hard on Monday as the Dollar strengthened. The Australian Dollar and New Zealand Dollar broke on the news, but the Canadian Dollar suffered the most damage.

Lower crude oil and industrials metals had the biggest effect on the USD CAD. Once these commodity markets broke, traders covered shorts and may have entered the long side when this pair crossed 1.1290. Upside momentum may stall at 1.1419, but the charts are indicating that a rally back to 1.1922 is possible.

Many traders feel the USD CAD has dropped too far, too fast. In fact the Bank of Canada expressed its concerns about an expensive Canadian Dollar last week. It feels that a further rally will snuff out the current economic recovery by squelching demand for Canadian exports.

Look for the USD CAD to rally especially if speculators begin to side with the BoC .

Tags:
canadian-dollar

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