November 22, 2009

Canada Afternoon: C$ Ends Lower Amid Subdued Risk Sentiment -

Canada Afternoon: C$ Ends Lower Amid Subdued Risk Sentiment - "'The weaker currencies in the G-10 bloc this week with risk aversion climbing a bit have been the commodity currencies like Australia, New Zealand, and Canada,' said currency strategist Shane Enright of CIBC World Markets in Toronto. 'If the market presses on with theme we've had in the last two days of U.S. dollar strength, my guess is it will stop stalling around those mid-C$1.0700 levels.'
Chief foreign exchange technical analyst George Davis of RBC Capital Markets in Toronto suggested that mounting concerns about an increasingly illiquid year-end trading environment are also contributing to a reluctance to take positions in less widely traded currencies like the Canadian dollar.
Davis said that the U.S. dollar's penetration and close beyond key technical resistance in the C$1.0685 area could in coming days promote a move by the U.S. dollar-Canada pair into the mid- to high-C$1.0800s, which would mark the Canadian dollar's weakest levels since early October.
Currency trading will likely become increasingly illiquid and subject to exaggerated volatility next week, given Thursday's U.S. market close for Thanksgiving, and also holidays in Japan and other Asian countries throughout the week."

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