GFX Morning Commentary February 27th, 2012

Good Morning,

The suggested range for the Canadian dollar today against the US Dollar is .9910-1.0025

The suggested range for the Canadian dollar today against the Euro is 1.3370-1.3500

The suggested range for the Canadian dollar today against Sterling is 1.5750-1.5875

The US Dollar is weaker this morning as the Euro has hit a three month high against the Greenback, the Euro has bounced on reports that the European Central Bank will add some 500 million Euro’s in 3-years loans to the regions commercial banks to help them re-finance their operation, this will be the second time that the ECB will be adding money to the commercial banking sector in an effort to help them maintain their solvency and to help stabilize the sector as they all take losses on European sovereign debt. Yesterday also saw the Euro shrug off the news of S&P placing Greece on “selective default”, I am not that familiar with the term but I believe that is the lowest rating a bond can have and I wonder if such a ruling then triggers a whole bunch of legal issues over credit default swaps (insurance policies against a bond issuer going bankrupt) being redeemed. Either way the Euro is still quite strong at the moment, we will see if my view that this is only temporary wins out over the next few weeks.

The equity markets continue to like the recovery story in the US and yesterday saw a better than expected US housing report and today we are expecting a good consumer confidence report which should keep the good news flowing.

With the weaker US Dollar overnight the Loonie has been able to rally stronger this morning and we are back below 1.0000, but as I have been saying for what seems like a very long time now we continue to move back and forth around par and until we get some significant developments we will continue that trading pattern, yesterday saw the US Dollar sellers with some opportunity for extra value and today it is the US dollar buyers that need to stand ready if we see a clear break below .9950, with no economic news out of Canada today and the expectation of strong numbers out of the States equity markets will be higher to start the day which should lead USD.CAD to test lower at some point, tomorrow may prove a little more exciting as we do get the US GDP report for the 4^th quarter and we will get a good idea just how big this recovery actually is.

Have a great day

Mike

GFX FOREIGN EXCHANGE MORNING UPDATE

Tuesday, February-28-12

Market Indicators                   * For current market prices please contact our currency advisors or visit our
                                                  online site at www.gfxpartners.ca *

Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9958			1.0034
CAD/USD		1.0042			0.9966
EUR/USD		1.3437			1.3405
EUR/CAD		1.3383			1.3545
STG/CAD		1.5774			1.5922
AUD/CAD		1.0719			1.0707
CAD/JPY		80.76			80.34
CAD/CHF		0.9001			0.8953
CAD/HKD		7.7845			7.7273
CAD/CNY		6.3224			6.2768
Commodities
Gold		$1,778			$1,768
OIL		$108.30			$108.52
Option Volatility
Canada
O/N		10.65%			11.02%
1 Week		8.21%			8.41%
1 Month		8.43%			8.40%

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