GFX Morning FX Commentary, February 29th, 2012

Good Morning,

Todays suggested range for the Canadian dollar against the US Dollar is .9850-.9950

Todays suggested range for the Canadian dollar against the Euro is 1.3260-1.3370

Todays suggested range for the Canadian dollar against Sterling is 1.5730-1.5850

My apologies for the delay in the commentary, we have had a very busy overnight session and I am just catching up on all the orders that were executed.

The US Dollar looks set to regain some strength today as the Euro is off of its highs and trading weaker this morning. The European Central Bank announced that they will be lending the regions commercial banks 529 Billion Euros in new three year loans, this number is much higher than expected and just highlights the grave conditions the regions banks find themselves in. EURO.USD which had looked like it was going above 1.3500 yesterday now awaits North American Banks to push it below the 1.3400 level.

STOP THE PRESSES!!! There is actually some life left in the Canadian Dollar, the Loonie  finally staged a bit of a breakout as it broke towards the .9900 cent level, still not a huge trading range but at this stage any volatility is welcome by the markets, it is important to note that this was a Canadian Dollar move and not something depended on the other markets. It looks like global investors looked at the ECB move last night and have made a consensus effort to get out of Europe and to invest in more secure locations and into higher yielding products, if this trend continues we should see USD.CAD move towards .9800 over the coming weeks.

We have just seen the US GDP report for the fourth quarter come in better than expected, further evidence of a slow recovery in the US. Equity markets should like this and will push higher, if recent trading patterns hold true then USD.CAD should drop further but we shall see if last nights developments will finally disrupt the overall trading pattern.

There may still be room for USD.CAD to fall further and I still think it will but every time over the past two months that the Loonie has rallied USD.CAD has quickly snapped back so for US Dollar buyers  it may be a wise strategy to buy a percentage of your  next three months requirements  at these levels. For short-term US dollar sellers you most likely need to lower your orders at least to par and possibly lower if you want to try and get a little extra value.

Have a great day
Mike

GFX FOREIGN EXCHANGE MORNING UPDATE

Wednesday, February-29-12

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		0.99			0.9958
CAD/USD		1.01			1.0042
EUR/USD		1.3446			1.3437
EUR/CAD		1.3305			1.3383
STG/CAD		1.5765			1.5774
AUD/CAD		1.071			1.0719
CAD/JPY		81.37			80.76
CAD/CHF		0.9067			0.9001
CAD/HKD		7.847			7.7845
CAD/CNY		6.3539			6.3224
Commodities
Gold		$1,788			$1,778
OIL		$107.05			$108.30
Option Volatility
Canada
O/N		10.67%			10.65%
1 Week		8.26%			8.21%
1 Month		8.46%			8.43%