The USD/CAD pair rose as the U.S dollar strengthened with concerns bouncing back to market at early morning despite data that was released from Euro Zone today, as debt crisis worries over Europe forced investors to avoid higher-yielding assets such as Euro, Sterling Pound and stocks.
Germany sold 4.06 billion euros of 10-year bonds on average yield of 1.93% compared with the 1.98% yield recorded an auction earlier, where German borrowing cost fell today by 5 basis points as investors still consider German Bunds as the safe haven in the euro-area region.
However, and despite the 1.3 times bid-to-cover ratio, Germany didn’t meet the maximum target of 5 billion euros at the auction today, raising downside pressures on the euro and stocks throughout the trading session.
Furthermore, U.S factory orders came below expectations during the month of November, factory orders inclined by 1.8% compared with the prior revised reading of -0.2% and below expectations of 2.0%.
Now, eyes will be spotted on this year, and the performance of the European economy, especially after the ECB lent the European banks huge amount of money, so we expect that money should help the euro zone the pick up the recovery process amid ongoing challenges.
The USD/CAD pair could still rise if pessimism continues to dominate markets, as uncertainty remains the main theme in markets, and that could also lead to deep fluctuations for the USD/CAD pair.
Thursday January 5:
Canada will release the Ivey Purchasing Managers’ Index for the month of December. the Index is the Canada business activity index may accelerate to 53.0. Moreover, eyes will be still focused on Europe and the crises that could impact traders with year-start.