To start of the trading week, the Canadian dollar is projected to weaken as the Australian currency seeks further gains. Investor sentiment plays a role in the day’s skirmish between the CommDolls on an agreement among US Republicans last Friday to extend the debt ceiling for three months. AUDCAD price activity staggered in the first few hours of trading, even dropping to a 1.0409 low, but is now on a bullish hike.
Selling pressure for the Loonie emerged after signs of economic growth from the US and China failed to drive the Canadian currency and allowed the Aussie to capitalize. The technicals are working against the Loonie dollar, while the Australian currency benefits from exceeded forecasts on Chinese economic growth.
Further, Australian shares inched higher to hit a 20-month closing high in quiet trading. A report that a Spanish bank is interested in the National Australia Bank’s British business helped buoy gains. According to a Reuters report, the S&P/ASX 200 index finished the day 6.3 points higher at 4,777.5, building on a 1.3 percent climb last week for its biggest weekly gain in seven weeks. Trade was subdued with Wall Street scheduled to be closed later in the day for a holiday.
National Australia Bank climbed 1.9 percent to A$26.85, a three-month high, after the Sunday Times reported that Spain’s Banco Santander is considering a $3.2 Billion bid for its UK assets. NAB scrapped plans to sell 337 Clydesdale and Yorkshire bank branches last April, having struggled to attract a buyer, and instead announced plans to shrink the business, cutting 1,400 jobs.
With risk sentiment favoring the Aussie, while the technicals are likewise supporting a rise, a long position is recommended for the AUDCAD. Be on the lookout for probable technical price corrections.
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