By last week’s Tuesday, a rumor has spread that the European Central Bank (ECB) is buying bonds, and as a result spurred a rally for the euro. In addition, dollar-dominated commodities, such as crude oil and gold strengthened as well. The bullish trend was significantly magnified on Friday, following the U.S. Non-Farm Payrolls release. The end result was rather disappointing, showing payrolls are increasing at a lower-than-expected pace. In addition, the national unemployment rate rose to 9.8%, for the first time since April. This has weakened the dollar further, and naturally boosted crude oil and gold. Crude oil peaked at a 25-month high of $89.60 a barrel. Gold has peaked at $1,415 an ounce, trading near an all-time high.
Traders are advised to continue following the leading economic releases from the U.S., as well as updates regarding the European debt crisis. Special attention should be given to the today’s meeting between European finance ministers in Brussels, as they might declare their desire to enlarge the region’s bailout plan in order to fight debt contagion.
Today, there aren’t significant economic releases from the U.S. and the euro-zone, and traders may want to follow these reports from Canada:
• 13:30 GMT, Canadian Building Permits – The report measures the change in the total value of new building permits issued during October. If the end result will be positive, the CAD is likely to strengthen as a result.
• 15:00 GMT, Canadian Ivey Purchasing Managers’ Index (PMI) – This is a survey of about 175 purchasing managers, who are asked to rate their current business conditions. If the end result will beat projection for 56.4, the CAD might see gains vs. its major rivals.
