SubscribeDaily Futures Commentary July 7, 2009
Tuesday, July 07, 2009
Traders are looking for the September Canadian Dollar futures to open higher this morning. There may not be any major fundamental news driving this market higher this morning, but nonetheless traders like the long side. The main driving force behind this rally seems to be technically driven as many indicators have reached oversold levels.
On June 1 this contract topped at .9275. This high capped a huge rally that began on March 9 at .7700. The entire rally coincided with the rally in equities and commodities and clearly demonstrated investor desire for higher yields.
As equities rallied along with gold and crude oil, traders sold U.S. Dollars and bought Canadian Dollars. Another reason for the rally was that the Canadian economy seemed to be in a better position to recover than the U.S. economy. The Canadian banking system was certainly not as devastated by the credit crunch as much as the U.S. system and the Bank of Canada had not pumped that much stimulus into the economy.
As the U.S. Dollar was facing weakness because of the threat of inflation, the Canadian Dollar was not expected to …
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