Canadian Foreign Securities Purchases Activity Was Stronger Than Expected

Canadian Foreign Securities Purchases Actual 6.85B, Expected 4.12B, Previous 6.07B (Revised from 6.11B)

Release Explanation: Foreign Purchase numbers, or International Transactions in Securities (full title), measures the flow of assets classes including bonds, stocks and money market instruments that are purchased by overseas investors. “The numbers are important to monitor since foreign investment can only be done once foreign currency has been swapped into Canadian dollars. Unlike the U.S. which relies on TIC data flows to fund the Trade and Current Account balances, Canada relies as much on outflows of manufactured and raw exports.” TheLFB-Forex.com Trade Team said.

TheLFB-Forex.com Trade Desk Thoughts: Cross-border investment activity strengthened in March, as conditions on global financial markets appeared to be stabilizing. Canadian investors acquired $6.2 billion of foreign securities, led by the continued strong demand for foreign equities so far in 2009. Investment in foreign long-term debt instruments resumed, following several months of net sales.

For their part, non-residents purchased $6.8 billion of Canadian securities in March, largely federal and provincial short-term debt instruments. Foreign investors have made purchases of Canadian securities totalling $23.3 billion so far this year.

“By the time this report is released the process of swapping Currencies has already happened and may not have an instant impact on the Cad values” TheLFB-Forex.com Trade Team said. “It does however give a good idea of Canadian economic sentiment, however the global economic slowdown really has impeded these reports in their ability to reflect desire to invest in an overseas region. Right now these reports reflect little more than book balancing and swapping currencies at a very base level”.

Forex Technical Reaction: The cad (Usd/Cad) is trading slightly below the neutral pivot point (1.1455), after gaining approximately 90 pips since the London open

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