GFX Morning Commentary February 6th, 2012

Good Morning,

Todays suggested range for the Canadian dollar is against the US Dollar is .9925-1.0025

Todays suggested range for the Canadian dollar against the Euro is 1.3000-1.3100

Todays suggested range for the Canadian dollar against Sterling is 1.5700-1.5825

The US Dollar is stronger to start the new trading week as EURO.USD has fallen over 1% this morning on fears that a deal for the 2nd bail-out of Greece will fall apart. The Greek situation seems to be getting worse not better as previously negotiators were only worried about the size of the haircut that private investors were going to take but now it seems that the Greek Government is backtracking on the austerity program they agreed to put in place. Many EU officials were on record this morning as saying a disorderly default by Greece is a real possibility and hit the Euro-Zone hard, until this situation is resolved look for the Euro to trade weaker over the short-term. You can get a real sense know that EU leaders are fed up with this small economy holding the Euro Zone hostage and will tell them to take it or leave it, this week should get some resolution to the situation.

The Loonie is weaker this morning as USD.CAD has moved higher on the back of the drop in EURO.USD, the Loonie has picked up a bit of strength against the Euro and Sterling as the Canadian dollar is not quite as weak against the US Dollar as the Euro and the Pound. The Loonie which had been showing signs of moving towards the .9900 level last night quickly retreated as it keeps getting influenced by events outside of the country.

For today with equity markets pointing lower I would expect that the first move of the day for USD.CAD will be to mover higher and test parity, given recent trading patterns it would not be a bad idea for US Dollar sellers to leave orders at this level, if Greece does back down and they get an agreement it won't be long before USD.CAD is back testing the .9900 level

Have a great week

Mike

GFX FOREIGN EXCHANGE MORNING UPDATE

Monday, February-06-12

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Market Indicators

Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9964			1
CAD/USD		1.0036			1
EUR/USD		1.3056			1.3162
EUR/CAD		1.3014			1.3162
STG/CAD		1.5708			1.583
AUD/CAD		1.0675			1.0692
CAD/JPY		76.86			76.24
CAD/CHF		0.9268			0.915
CAD/HKD		7.7811			7.5555
CAD/CNY		6.3317			6.3027
Commodities
Gold		$1,717			$1,758
OIL		$96.82			$96.70
Option Volatility
O/N		12.29%			8.50%
1 Week		9.52%			10.00%
1 Month		9.43%			10.00%