By FX Empire.com
The USD/CAD pair rose sharply on Tuesday, as investors remained cautious before the Slovak vote for expanding the European rescue fund later in the day, which enhanced demand on the dollar as a favorite safe haven. The Slovak Parliament will discuss the expansion of the EFSF amid frictions between policy makers regarding the broadening of the European lifeline, knowing thatCanadareleased the housing starts index for September on Tuesday, where the index jumped to reach 205.9 thousand, above expectations of 190.0 thousand.
Nonetheless, we maintain our bullish projection for the USD/CAD pair, as we expect the pair to extend its gains over the coming period on rising pessimism over the outlook for growth and mounting fears from the EU debt crisis, although we expect to witness high levels of volatility as well.
Wednesday October 12:
The focus on Wednesday will be on the FOMC minutes for the last meeting when the Fed announced “operation twist” and with the lack of major fundamentals investors will keep their focus on the minutes for any hints for the coming move from the Federal Reserve.
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