The loonie could get another strong push from the rising of March Canadian CPI monthly by 1.1% from just .3% in February while the market was waiting for just .7% and also the core figure excluding the food and energy rose by .5% after a flat reading in Feb while the market was waiting for rising by .2% which shows growing of the inflation upside risks can push BOC forward to hike the interest rate. USDCAD has slumped after these data from .963 to .955 ahead of the low which has been reached earlier this month and has not been seen since November 2007 at .9525 on the tension in Libya which is fueling the oil prices and threating the supplies from the middle east while Canada has a surplus of it and also it is away from this tension which underpinned the demand of it as a safe haven too.
The worries about the debt outlook have accelerated in the beginning of this week to dampen the market sentiment weighing negatively on the European stocks and the single currency because of spreading rumors about preparing request from Greece to restructure its debt while there are market worries about the new Finnish government which can refuse contributing in funding the Portuguese new request for the aid of the bailing out plan which has been underpinned by 190 billion euros to be 440 billion recently from 250 billion for aiding European ailing of debts countries. The single currency has come under strong pressure during the Asian session as it has broken 1.4241 accompanied with the trend line support of the rising from 1.2873 to 1.3751 to reach 1.4155 before rebounding again and it is now trading above 1.43. versus the greenback which could get benefits from these worries about the debt in Europe which increased the risk aversion sentiment which has been triggered in the beginning of this week by PBOC's fourth request of this year to the Chinese banks to exceed their reserved holding of liquidities by .5% for fighting the inflation which has reached in March 5.4% while it has been forecasted to be just 5.1% from 4.9% in January and February and from another side by the shocking lowering of S&P rating agency to the US economy to negative from neutral.
After the Silver could find strong support at 42.17 following this surprising downgrading basing on the debt widening in US, it could rebound above 43 again and it is now trading at 43.58 after making new high today at 43.77. The silver could jump above 1.42 level following the strong inflation figures of china as a hedge versus inflation while situation in Libya is still mixed threating the oil supplies from the middles east to be cut. The silver could end its recent profit taken wave at 39.67 making a higher low after it has ended the previous correction at 36.45 well above the trend line support extended from 26.39 to 33.66 which is still underpinning it technically and its next supporting levels are expected to be at 40.52 then 39.67 again following over a longer range by 38.04, 37.06 and 36.45 again.
Kind Regards
FX Market Strategist
Walid Salah El Din
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