USD/CAD dropped to its lowest levels since mid-October, after the Canadian government gave approval to the takeover of two Canadian energy companies by foreign companies. The government approved a $15.1 billion takeover of Nexen by the China National Offshore Oil Corporation, a state-run company, as well as a $5.2 billion bid for Progress Energy by Petronas, a Malaysian state-owned energy company. The deals generated a great deal of controversy, and there was a great deal of opposition to foreign state-owned companies purchasing stakes in the Canadian energy sector.
Following the announcement, Prime Minister Steven Harper stated that from now on, foreign state-owned companies will be limited to holding minority stakes in Canadian energy companies. Both Canada and the US posted strong employment data for November. In the US, Non-Farm Employment Change was lower in November, but came in well above the forecast. As well, the US unemployment rate dropped to 7.7%, its lowest level since February 20o9. Canadian employment figures were exceptionally sharp. Employment Change jumped by 59.3 thousand, crushing the market estimate of 11.3K.
Also, Prelim UoM Consumer Sentiment disappointed, as the key consumer indicator dropped to 74.5 points, a four-month low. The market estimate stood at 82.4 points. Finally, the US dollar remains under pressure as there is growing speculation that the Federal Reserve may implement further quantitative easing at its policy-setting meeting later in the week. There are no scheduled releases on Monday out of the US. The sole Canadian release was Housing Starts. The indicator weakened in November, posting a reading of 196 thousand new residential units. This was below the estimate of 202K.
USD/CAD for Sunday, Dec 7, 2012
USD/CAD for Monday, Dec 10, 2012
USD/CAD Dec 10 at 17:30 GMT
0.9870 H: 0.9888 L: 0.9865
S3 S2 S1 R1 R2 R3
0.9625 0.9767 0.9812 0.9909 1.00 1.0041
USD/CAD dropped following Friday’s announcement that the Canadian government had approved the foreign takeover of two Canadian energy companies. The pair reacted quickly to the news, dropping to a six-week low, as it broke through support at 0.9909. The pair is trading in a narrow range in the early part of Monday’s North American session.
•Current range: 0.9812 to 0.9909
Further levels in both directions:
•Below: 0.9812, 0.9767, 0.9625, 0.9526 and 0.9445.
•Above: 0.9909, 1.00, 1.0041, 1.0157 and 1.0252.
•0.9812 is providing support. 0.9767 is stronger.
•0.9903 is providing weak resistance.
USD/CAD dropped over the weekend, following approval by the Canadian government of a pair of foreign takeovers of Canadian energy companies. However, there is a slight bias in favor of long positions, so there is room for the pair to reverse the recent trend and move higher. 0.9903 is providing weak resistance, so if the pair pushes above that line, it could continue to push towards the important parity level.
There are no scheduled US releases today and just one Canadian release, we could be in for a day of narrow range trading, barring any unexpected developments. The pair has settled down since dropping sharply over the weekend following approval of foreign takeovers of two Canadian energy companies.
13:15 Canadian Housing Starts. Estimate 202K. Actual 196K.
(All release times are GMT)