GFX Morning Commentary February 22nd, 2012

Good Morning,

Today's suggested range for the Canadian dollar against the US Dollar is .9945 – 1.0015.

Today's suggested range for the Canadian dollar against the Euro is 1.3190-1.3300

Todays suggested range for the Canadian dollar against Sterling  is 1.5620-1.5750

The US Dollar is marginally stronger this morning in very quiet trading conditions. The Euro had a very narrow trading range as it looks to consolidate after the Greek agreement, it will most likely trade between 1.3100 and 1.3300 against the Greenback for a while as the currency markets await the next crisis to develop, ultimately I still favour a weaker Euro as I am not convinced the present leadership in Europe has the ability to take the necessary action to solve the problems.

Now that Greece (for the moment) is out of the way the currency markets seem to have moved their focus to the Japanese Yen where the Government there has undertaken a Quantative Easing program to further weaken the Yen and try and stimulate an economy that has been morbid for over 20 years. CAD.JPY which traded at a low of 72.60 in October last year is now at 80.50 so it seems to be working, USD.JPY reached a recent low of 75.75 and is now trading at 80.00 so clearly the Japanese Central Bank wants to see a weaker Yen.

The Canadian Dollar is slightly weaker this morning as USD.CAD once again was moving towards parity last night, our short-term scenario of USD.CAD moving back and forth around par continues to unfold.

Up today we get further evidence of a slow US recovery unfolding as the US existing home sales report should show an increase over last month, this would be the fourth month in a row of US home sales increasing and is a great sign that the overall US economy is improving.

For today if the equity markets like the US home sales report then USD.CAD should move back towards the .9940 level, if the report disappoints and it is not as high as the market expectation look for USD.CAD to break back above par again, if the report comes in at expectation then it should be a quiet day today.

For today's opening rates at 7:00 am please visit our

Have a great day

Mike

Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9981			0.997
CAD/USD		1.0019			1.003
EUR/USD		1.3221			1.32
EUR/CAD		1.3197			1.3163
STG/CAD		1.5672			1.5753
AUD/CAD		1.0613			1.0629
CAD/JPY		80.36			79.82
CAD/CHF		0.9144			0.9165
CAD/HKD		7.7682			7.7786
CAD/CNY		6.3048			6.3119
Commodities
Gold		$1,755			$1,740
OIL		$105.66			$104.36
Option Volatility
Canada
O/N		11.53%			11.80%
1 Week		8.80%			8.99%
1 Month		9.07%			9.22%