After failing to surpass the 1.0500 mark and falling 53 pips in earlier exchanges, the Aussie-Loonie pair is making another hike. The Canadian dollar is projected to pare earlier gains from its Australian counterpart as investor sentiment favors the Asian commodity dollar. Trade sentiment has favored the riskier Aussie in the New York exchanges as the US equities market carries the demand from the nascent corporate earnings season, while the Loonie is beset by the interest decision today.
A report by CNBC.com’s JeeYeon Park states that “Stocks reversed earlier losses to close higher for a third-straight session Tuesday, with the Dow and S&P 500 extending their recent multi-year gains, ahead of a busy week of corporate earnings and amid hope for a deal on the debt ceiling.”
A day after markets were closed for Martin Luther king day in the United States, and following US President Obama’s inaugural address exhorting the nation to rise up against the political deadlock in the nation’s capital that could frustrate his second-term efforts, stocks continued to hike. The nascent corporate earnings season is seen to buoy demand for risk. Today, the following are scheduled to report their fourth quarter financial data: McDonald’s, United Tech, Abbott Labs, Coach, WellPoint, Amgen, Apple, F5 Networks, Netflix, Sandisk, Symantec, and Western Digital.
Meanwhile, in the debacle over the debt ceiling, US House Speaker John Boehner indicated yesterday that Republicans will vote on an extension of the federal debt ceiling to allow Treasury to borrow money until mid-May. White House spokesman Jay Carney indicated that the president would likely sign the measure if the Congress passes it.
In the Maple Leaf, the Bank of Canada is forecast to maintain its benchmark interest rate at one percent in a decision today. Aaron Fennell, a futures specialist at Bank of Nova Scotia (BNS)’s ScotiaMcLeod unit said that, “we’re a long way from getting back to normal interest rates. If they do start raising rates in Canada, they’re going to do so very cautiously, 25 basis points at a time. They’ll probably do it two times and then lay off for a while to see what happens.”
Risk confidence benefits the Aussie despite consumer prices gaining less than forecast, resulting in probable losses for the Loonie currency. A buy bias is suggested for the AUDCAD, though it would be wise to be on the lookout for expected technical price corrections.
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