The dollar remained largely unchanged on Monday, with little data out to inspire moves. As data on consumer spending and the housing market has been sufficiently weak to preclude serious discussion of a policy tightening and with rate expectations still under upside pressure in other major economies, the USD has remained on the defensive. High oil prices also continue to weigh on the dollar, which diverts USD accumulation from Asia reserve managers to petro-currency funds, likely to diversify dollar holdings.
The Canadian dollar, the biggest winner across the board, hit a fresh 30-year low at 1.0447 against the dollar. Bank of Canada is likely to increase its interest rates by a quarter percentage point to 4.50% today. Besides, recent data showed Canada labor market is in good shape and manufacturing expanded. Also commodity prices are moving in the Canadian dollar’s favor.
Market will be watching Fed Chairman Bernanke speaks on inflation tonight for clues on the FX market.
With the lows hit last Tuesday at 1.0903 very fractionally above the 76.4 retrace of the entire move up from Dec 05 lows. LT 76.4 retrace holds are often seen as significant turning points. Attractive to look at longs with a stop just below 1.0900.
DOMAINS YAHOO FOR CONFERENCE CALL SERVICE
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