​VBCE Daily Foreign Exchange Update for Thursday, Dec. 15, 2016

USDCAD spot rate: 1.3380 - 1.3388 (as at 8:30am PST)

Ranges:

Asia:

1.3265

to

1.3325

Europe:

1.3276

to

1.3351

North America:

1.3331

to

1.3398

Technical Support / Resistance:

S2

S1

R1

R2

1.3200

1.3260

1.3415

1.3475

Key Economic Data Releases:

-U.S. CPI .2 (.2 exp.) .4 previous

-U.S. Initial Jobless claims 254k (255K exp.) 258K previous

-CAD Mfg. Sales -.8% (.4% exp.) .3% previous

Key Event Calendar:

Date

Canada

U.S.A.

Dec. 16

Net foreign securities trans.

Building permits, housing starts

The dollar charged to an almost 14-year high and government bond yields rose sharply on Thursday, after the Federal Reserve hiked U.S. interest rates and signaled more would follow at a faster pace next year.

European shares got off to a solid start with banks up almost 2 per cent, cheered by the prospect of a boost from higher rates to their lending profits, but the main action was elsewhere. Bond markets saw yields on short-term U.S. debt surge to the highest since 2009, sending the dollar to peaks last seen in early 2003, which in turn prompted China's central bank to set the yuan at its weakest level against the greenback since 2008. The Fed's anticipated policy path, and expectations U.S. President-elect Donald Trump will get growth motoring, are keeping emerging markets on edge as capital gets sucked from more fragile, export-dependent economies toward dollar-based assets. The Fed's rate rise of 25 basis points to 0.5-0.75 per cent was well flagged but investors were spooked when the "dot plots" of members' projections showed a median of three hikes next year, up from two previously. Currently, the TSX is up 0.24% and the Dow is up 0.54%. EURCAD is down 0.65% trading between 1.3874 and 1.3924. GBPCAD is down 0.49% trading between 1.6605 and 1.6723. JPYCAD is down 0.37% trading between 0.01124 and 0.01129. Gold is down 2.90% trading between $1,127 and $1,134USD/oz., silver is down 1.21% trading between $16.00 and $16.95USD/oz., while oil is down 0.75% trading between $49.75 and $52.27.

Sources: Reuters, Bloomberg, FXStreet, RBC Capital Markets, Bank of Canada, U.S. Federal Reserve, CNBC, Forexlive, CME Group

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