Mar 02 2007 cont.... Still holding my other half of USDCAD long spike up to 1.1765 proved to be short lived ... maybe the USDCAD is too expensive right now Most likely will keep my longs to see what happens monday, unless it sustains a downward move past my first settle price of 117.40
Mar 05 2007 ... USD/CAD looks to still have upside potential. I am still looking for the 1.1800 breach (USD/CAD has not been above 1.1800 since the beginning of February) There is a pretty heafty forward looking econ number this morning at 1000 am EST = Ivey Purchasing Manager's Index. For all that do not know what this is please follow this link: http://iveypmi.uwo.ca/english/pmiindex.htm IVEY is much like the USA ISM Index. Consensus is looking for a higher Index number MoM, which I expect too (mostly because a lot of purchasing managers buy more for the spring season than the winter. However I am bias toward the downside, mainly because of Canada's slowing economy and recent economic numbers. Factor this in with still weak metal prices and that oil prices historically are lower in the spring, then I see no reason for the USD/CAD contract to become weak. I might ride the expectation before the IVEY number and cover my longs beforehand and then re-position my longs in case of a sell-off. This remains to be seen due to relative USD/CAD strength or weakness in the erly morning (EST) hours.
I'm a bit confused about the IVY purchasing index. How do I use it to determine purchases for the CAD/USD
Since this a forward looking number about consumer consumption, a higher than expected number should predict higher consumer consumption in the months to come, if the purchasing managers of Canada are correct in buying more now to sell more later on. Plus a higher than expected number says that Canadian companies are putting money into the economy. So generally speaking, if the IVEY is higher than expected the Canadian economy could perform better in the months to come, thus makingthe Canadian dollar relatively more valuable than yesterday. However you still have to factor in other influences, such as today's US ISM Services number. It could cancel out the IVEY's affect on the currency pair contract. I hope this helps
I don't think they give a crap about the IVEY, hasn't been around long. Not even remotely as important as ISM. Its a measure of purchasing manager sentiment, not consumer. Sometimes its up here a few seconds early. http://iveypmi.uwo.ca/english/commenteng.htm
average absolute miss of IVEY to Bloomberg consensus has been 5.7 points in last year. So today's miss was less than average = non-event.
March 05 2007 cont... I got shaken out of half of half (or 1/4) of whatever I have leftover from my original USDCAD long. shaken out @ 1.1786 I thought the current support just below 1.1800 was about to collapse. In any case I still have 1/4 of my original position left. I am trying to discern how the worst than expected US ISM number and the much better than expect Canadian IVEY number affect this currency pair. At first glance this combination of numbers should not bode well for the usdcad currency pair ... however ther usdcad still finds support just under 1.1800 for the time being. Lets see what happens ... metal prices are still negative and light sweet crude is off a dollar ... so the commodities might be bolstering the value of the usdcad. Again that remains to be seen
Well I think 3 to 4 index point either way is out of line with expectations and can generate a considerable short term move that could be detrimental to my position, or could open up some buying or selling opportunity where one did not exist or was too expensive. I agree that overall 3 to 4 index points is no big deal, but again it can open up opportunities or provide signals for furture moves.