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Mixed Canadian Dollar Leaves Loonie At Mercy Of Dollar

By DailyFX Research Team
14 October 2005 17:45 GMT
The USDCAD pair slowly found its way higher through wild fluctuations in both directions in the New York session.  An initial drop following the open of Canadian markets was quickly reversed later in the session as mixed Canadian data had to compete with a barrage of U.S. releases.  The wild swings throughout the day set the low at 1.1794 and a peak four pips shy of the 1.1900 mark.  The pair was quoted at 1.1858 at 17:30 GMT.

The two releases out of Canada offered little direction for fundamental traders on the session, as both reported at opposite ends of the spectrum.  Initially providing strength to the loonie were manufacturing shipments.  Shipments more than tripled expectations in August, rising a record 3.3 percent.  The rise was attributed to high fuel costs and a recovery in the production of automobiles and parts.  This indicator may play a heftier role after the loonie settles as the report soothes some concerns over growth through the end of the year.  The second release, reported simultaneously with the manufacturing data and effectively negating the optimism it offered, was the plummet in September new vehicle sales.  Sales tumbled 7.9 percent as employee discounts loose their sheen.  Instead consumers turned their attentions to concerns of gas mileage causing them to shy away from larger vehicles and trucks.  

Gold and energies stocks pulled the Canadian equity markets down this morning as oil softened and gold looked to give back some of its recent gains.  The benchmark S&P/TSX composite was up 3.63, trading midday at 10433.34 after posting its high immediately after the open.  In line with their industries, Garneau Incorporated, whose main business is in oil and gas pipelines, lost 16 percent for the day and Golden Star Resources, a gold mining company, lost over 7 percent.

The price of the 10-year note dropped 0.04 to C$103.53.  Yields rose for the sixth day by one basis point to yield 4.053 on speculation that the Bank of Canada will likely raise rates next week.

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14 October 2005 17:45 GMT