Week in FX Americas – Boring Loonie Continues A Sideways Chop

With no North American data to bully the loonie on Friday, the interest and commodity sensitive currency ended the week trading rudderless in another tight boring range. Many investors have shifted their attention to the euro-zone developments. Last Thursday, the 2013-14 Canadian budget was delivered amid little fanfare and with no impact on the CAD. The only thing of note was the reaffirming of Canada’s Triple-A credit rating, a recognized seal that is quickly becoming a rare attribute bestowed on developed countries.

After last weeks employment numbers, many investors were positioned and expected some modest bullishness from the currency. In hindsight, domestic macro drivers have been too mixed to give the loonie clear direction. Several analysts believe the divergence between Canada’s services and manufacturing sector will end up being temporary. With Canadian households remaining cash rich and a banking sector amongst the strongest globally, certainly favors the currency. Once the unknown Cypriot variable is played out and remains contained, the loonie should finally break out of its current range. For now, the sideways chop continues with range trading being the best strategy.

• Lets not forget about Sequesters: House on track to pass deep cuts to budget
• Bernanke Says Fed May Alter Bond Buying
• Sales of Existing U.S. Homes Have Likely Climbed to Three-Year High
• Bernanke Reassures Markets Easing to Continue
• New US Home Rise in February
• Canadian Manufacturing Sales Drop 0.2 percent in January
• Bernanke Gets Hold of Fed Messages
• QE’s Impact Coming to an End

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