GFX Morning Commentary, March 13th, 2012

Good Morning,

Today’s expected range for the Canadian Dollar against the US dollar is .9850-.9950

Today’s expected range for the Canadian Dollar against the Euro is 1.2960-1.3050

Today’s expected range for the Canadian Dollar against Sterling is 1.5580-1.5700

The US Dollar is marginally stronger this morning as European equity markets are higher and the EURO.USD  lower as the final sign-off by EU finance ministers on funds being released to Greece has been approved, hopefully this will be the last I write about Greece for some time. There was a report yesterday that the EU withheld almost 500mln (not billion, just million so nothing of consequence!!) of Euro loans to Hungary citing the fact that the country could not get its deficit under control, the markets did not react to this story but it may be a developing situation worth watching, Hungary is not a member of the EU and if they are in trouble it could still affect the whole region. As I am writing a story is coming out that the EU is asking Spain to reduce their spending once again, Spain runs a yearly deficit of about 5% of GDP which given their economy is unsustainable, given the size of their economy Spain will become a real headache for the EU in the later part of this year and into 2013.

Sterling received a boost overnight as the house price index jumped once again and was the strongest increase since July 2010, a good sign for the economy in the UK, GBP.USD reached a high of 1.5670.

The Canadian Dollar once again had a very quiet night as USD.CAD continues to move around the .9900 level, with the exception of the possible takeover of Viterra there is really nothing in Canada that could push the Loonie one way or another, direction for USD.CAD will still be dominated on news out of Europe and the USA.

Today's trading will be dominated by two events, the US Retail Report for February which should show an increase of 1.1%, the best showing in 5 months and the US Federal Reserve interest rate announcement later this afternoon. With a modest recovery underway in the US we will not see any change in US interest rate policy  and it is very unlikely that we will see and new stimulus for the economy announced , it will be a more stay-the-course speech, but as always any surprises will bring volatility back to the market.

I think the US Fed will be a non-event but if we do see any movement I will send out a currency alert.

Have a great day

Mike

GFX Morning FX Rates
Tuesday March 13th
Currencies	7:00am Today's Opening				Yesterday's Opening
USD/CAD		0.9838			0.9907
CAD/USD		1.0103			1.0093
EUR/USD		1.3119			1.3100
EUR/CAD		1.2988			1.3020
STG/CAD		1.5498			1.5565
AUD/CAD		1.0428			1.0400
CAD/JPY		83.4500			83.0000
CAD/CHF		0.9285			0.9275
CAD/HKD		7.8392			7.8300
CAD/CNY		6.3908
Commodities
Gold		$1,693.78			$1,704
OIL		$106.89			$106.47
Option Volatility
Canada					11.93%
O/N		11.75%			9.20%
1 Week		9.03%			8.83%
1 Month		8.67%