Header help text

Start trading with a free $30

There is no better time than now
Your first deposit is on us

Grab your $30 from XM

Currency Currency
by ForexNewsNow Team on November 10th, 2010

USD/CAD testing support after trade balance numbers released

US and CanadaNEW YORK (Forex News Now) – The U.S. and Canadian trade balance numbers were released at 8:30 A.M. (GMT – 5) this morning surprising economists as they favored the United States this time.

While the numbers are not always major events (it always depends on what the markets are focusing on at the moment), they often can give insight into which way capital is attempting to flow around the world. In this case, it shows that exports are slowing for Canada, and expanding for the United States, albeit at a negative rate for the Americans.

The U.S. trade balance figures for September came out at -$44 billion, which was better than the expected -$45 billion, and shows that perhaps the U.S. dollar’s shrinking FX rate is starting to help with exports a bit.

Simultaneously, the Canadians released their trade balance numbers, which can in slightly lower than expected at -2.5 Billion for September. This could possibly be due to the strong Canadian dollar, and even more likely, the weak demand for oil over the last few months (even though speculators are bidding the price of crude oil up as a result of the weakening U.S. dollar).

As the attached chart shows, the speculators might be winning the battle. The current move down has seen the Canadian dollar FX rate reach parity against the U.S. dollar yet again. The pair has been stuck between 1.000 and 1.0700 over the last year, as the markets seem intent on testing the support level of parity over and over.

It should be noted that recently we have seen the pair dip below the even mark slightly, and pop back up. Unless there is some kind of fundamental change, it might be difficult for any sustained move below to be achieved. Until a longer-term close below parity in the FX rate, this pair has to be considered to be stuck in consolidation still.


By ForexNewsNow Team

This is a general account of the ForexNewsNow Team. It is used to published exclusive content carefully crafted by our experts as well as it is used to bring you the most recent industry highlights from our guest contributors that wish to remain anonymous.

More content by ForexNewsNow Team

Comments (0 comment(s))